No Claim Bonus in Two Wheeler Insurance

What is NCB in Bike Insurance?

NCB, commonly known as No Claim Bonus, is a reward offered by bike insurance companies if you do not raise a single claim during the previous policy period. In simpler terms, if you have ridden your two-wheeler without any accidents or damage that required a bike insurance claim, you are eligible for this bonus. It is a way for the insurer to encourage safe driving. Moreover, the longer you go without making a claim, the higher the discount you can get.

NOTE: NCB in two-wheeler insurance is only applicable to own damage premiums and not to third-party bike insurance premiums.

How Does No Claim Bonus (NCB) Work?

For every claim-free year, you earn a No Claim Bonus (NCB), which gives you a discount on your premium at the time of renewal. Over time, this bonus can reduce your premium by up to 50% after five claim-free years. However, if you make a claim and the insurer pays out, your NCB will reset to zero, and you will lose the discount at the next renewal.

Additionally, if you are not at fault in an accident and the other party's insurance covers the damage, your NCB will remain intact. Similarly, if your claim is not honoured, your NCB will not be affected. However, if your bike is stolen or both parties are at fault, your insurer will have to pay the claim, causing you to lose the NCB.

How is NCB Calculated in Bike Insurance?

The NCB for your bike starts with the first renewal of your comprehensive bike insurance policy. A savings of 20% is granted on successful two-wheeler insurance renewal after the first claim-free year. After every consecutive claim-free year, the bonus percentage increases by 5-10% during renewals.

The following table shows how to check NCB in bike insurance based on the number of claim-free years:

Let's understand this with the help of an example.

For instance, as a bike owner, you get 20% NCB after your first bike insurance renewal for not raising a claim. You decide to retain it and not use it. Then, after the second claim-free year, your percentage increases to 25%. Similarly, the NCB increases to 35% and 45% after the third and fourth claim-free renewals. Ultimately, you get 50% NCB after five consecutive claim-free years.

Now, you decide to use the NCB savings on your premium amount and pay only half the amount. Thus, you will receive higher savings on your premium by accumulating and using the NCB after five consecutive claim-free years.

NOTE: The NCB will not increase after five consecutive claim-free years. Thus, you should use your NCB after the fifth-year bike insurance renewal and restart your NCB cycle from the next renewal.

Benefits of NCB in Bike Insurance

No Claim Bonus (NCB) in 2-wheeler insurance offers the following benefits to the policyholder:

• Premium Discount: The accumulated NCB helps to reduce the bike insurance premium amount from a minimum of 20% to a maximum of 50% if the policyholder does not raise any claim in the policy period.
• Transferable Benefit: NCB is granted to the policyholder, not the bike. This means if you sell your bike or switch to a different insurer, your NCB remains intact and can be transferred.
• Reward for Safe Driving: NCB acts as a reward for prudent riding. It compensates you for not using your two-wheeler insurance facility during the policy year despite paying the premium.
• Encourages Safe Driving: It encourages bike riders to drive their two-wheelers safely.

How is NCB Transferred to Another Bike?

NCB in two-wheeler insurance can be transferred or retained with you if you replace your existing bike with a new one or even if you want to change your current insurance provider when the renewal is due.

Transfer of NCB is an easy task. You simply have to submit Form 29 & Form 30, accompanied by the application requesting for transfer of the NCB addressed to the existing insurer. Based on this, the insurer will issue an NCB certificate with a validity of three years. You have to submit the certificate to the new insurer so that you can avail the benefits of NCB.

If you buy two-wheeler insurance online, there is no need for the NCB certificate as a declaration would suffice. However, do not hide any circumstances under which a claim was raised, as the new insurer will verify every detail with the previous insurer. At any point, if it finds you guilty, the insurer can reject your application.

You may like to read- How No Claim Bonus is Calculated in Bike Insurance?

Getting the Most Out of NCB in Bike Insurance

Take a look at the certain things that you must follow to get the most out of your NCB benefit:

• In case of selling the old vehicle, ensure that only the ownership is transferred and keep a copy of the new entry in the RC book for future reference.
• After receiving the delivery note from the new owner, send a copy of the same to the insurance provider. Based on this, the insurer will issue an NCB certificate with a validity of 3 years.
• NCB certificate has to be sent to the dealer from whom you are planning to buy your new vehicle. They will initiate the transfer process with the new bike insurer.
• If you are buying two-wheeler insurance online, do not ignore checking the various available add-on covers and comparing them. For better insights and comparison, you can visit Policybazaar.com & find the right bike insurance policy for you.
• While switching the policy, the existing insurer will provide proof of accumulated NCB at the end of the term, which you have to show the new insurer.
• It is advisable not to switch your insurer unless it is necessary. Remain with the same insurer and not claim your insurance so you can earn as much NCB as possible.