No Claims Bonus or NCB is the reward offered by the insurance provider for not making a claim during the bike insurance policy period. It is given as a discount on the premium amount in the subsequent year at the time of policy renewal. NCB in bike insurance increases every consecutive claim-free year.
Hence, it would be wrong to think that your premium money is wasted if you do not make a claim during the policy tenure. While insurance provides financial cover for your expenses during mishaps, not using the cover offers a host of other benefits including NCB. In all, NCB brings down your premium amount. It means more savings for the same coverage.
No Claim Bonus on bike insurance: What is it?
If you do not make a claim on your bike insurance policy during the tenure, you are eligible for NCB at the time of renewal. This is a big advantage as premiums increase over time mostly due to inflation and rising repair costs. As a result, you may end up paying higher premiums for the same coverage at the time of motor insurance policy renewal. However, if you are eligible for an NCB in bike insurance, your premium amount will come down significantly.
No Claim Bonus on bike insurance: Various benefits
Some of the several benefits of NCB include:
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Rewards for being a responsible bike owner
Whereas a motor insurance policy provides a protective cover, an NCB works as an incentive for you to ride your bike safely and adhere to all the traffic rules. By being a responsible rider, there will be fewer damages and claims, all of which increase your NCB.
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Transferable asset
NCB is a transferable asset. It means you can enjoy the NCB benefits even if you shift to a different insurance provider at the time of renewal. All you have to do is get your NCB certificate from the previous insurer and submit it to the new insurance company.
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More savings on premiums
NCB brings down the premium amount of your motor insurance policy significantly, which means more savings for you.
NCB on bike insurance provides savings in the range of 20% and 50% on your two-wheeler insurance premiums. The NCB depends on the number of years that go by without you making a claim. The higher the NCB, the bigger discount you get on your premium amount.
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Linked to the owner, not the vehicle
NCB rewards bike owners for responsible ownership. Even if you are looking to replace your old bike with a new bike, you can avail of the NCB accumulated on your old bike while purchasing insurance for your new two-wheeler.
No Claim Bonus on bike insurance: How to claim?
When you are renewing your motor insurance policy, you can avail of the NCB that has been earned on the old policy.
To calculate the premium amount after applying NCB, you have to consider the total claim-free years on your policy and apply the NCB rate and claim discount on the premium amount accordingly. Hence, the next time you get a bike insurance quote, make sure to check if your insurer had added the NCB benefit.
No Claim Bonus on bike insurance: How is it calculated?
NCB starts from 20% and can go up to 50% for five consecutive claim-free years, depending on the age of your bike.
The discount starts with 20% for the first claim-free year and goes up cumulatively as the claim-free years pile up. After you touch five consecutive claim-free years, your NCB is capped at 50%. Overall, NCB can result in considerable savings over time.
Keep in mind that NCB is given only on a comprehensive bike insurance policy and not on third-party insurance plans.
No Claim Bonus: When can it be terminated?
If you make a claim on your motor insurance policy even once, you lose the accumulated NCB benefits. Here are the times when NCB is terminated:
- Should you claim during the policy year, you do not become eligible for getting a discount on the following year’s policy premium.
- When you fail to renew the policy within 90 days from the date your policy lapses.
Conclusion
It helps to have an understanding of how NCB accumulates and how it applies to enjoy the benefits. Also, you should learn how to calculate your NCB to ensure the insurer has applied the related discounts. In a nutshell, consider NCB as your reward for maintaining your vehicle and being a responsible driver. With each claim-free year, you can save on premium costs by way of discounts as per the NCB rate.
