‘No Claim Bonus’ or NCB in bike insurance is a bonus in form of a discount on premium to be paid in a renewal insurance policy if no insurance claim is made in the previous existing policy.
How does NCB in a Bike Insurance work?
One has to renew the insurance policy once it expires. If there’s no earlier claim in an insurance policy, then the insurers reward with NCB. They provide a discount or relief in the premium payment for the next policy to the policyholders. This starts with the renewal of the insurance policy. If no claim was made in the first policy before its expiry, then an NCB in bike insurance is awarded in the next year on renewal.
The insurer provides NCB on every renewal year as long as the insured does not make any insurance claim. The discount percentage keeps increasing annually up to a maximum of 50%. No claim bonus is reset to zero if an insurance claim was made in the previous year. This is irrespective of the fact that the policyholder might have restrained from claiming for many years earlier than that. This is how the No Claim Bonus in bike insurance works.
The following are a few features of No Claim Bonus in bike insurance:
- NCB in bike insurance is applicable on renewal of the ‘comprehensive bike insurance policy’ or ‘own damage cover’. This applies only on ‘own damage cover’ (even in a Comprehensive Policy) and not on ‘third party liability insurance cover’
- NCB increases by 5%-10% every year and up to a maximum of 50%. For instance, if you do not claim in the first year then you may be awarded a bonus of 20%. This shall go up to 25%-30% in the next and so on up to 50%. The table below explains it better:
|Year||NCB Discount (NCB in a Bike Insurance)|
|1st Claim Free Year||20%|
|2nd Claim Free Year||25%|
|3rd Claim Free Year||35%|
|4th Claim Free Year||45%|
|5th Claim Free Year||50%|
- NCB is calculated on the Insured Declared Value (IDV) of the bike minus the cost of its wear and tear
- Discounts of NCB in bike insurance can not be shared between two policies. It can be one at a one-time
- If you purchase a new vehicle and want to transfer the discount on to a new vehicle, you can do so because NCBs are transferrable
When does NCB in a Bike Insurance Get Canceled?
Other than the fact that No Claim Bonus of any vehicle on renewal policy becomes invalid if there is a previous insurance claim, the bonus may also become inapplicable in certain other situations as mentioned below:
- If the insurance policy is not renewed within 90 days of the expiry of the previous one then NCB in bike insurance is canceled
- When the policyholder cancels the policy before its expiry or completion of the tenure then also the No Claim Bonus for the particular year goes to waste
- If you fail to submit the retention letter to the insurer to transfer the discount of No Claim Bonus in bike insurance from an old two-wheeler vehicle to a new one
NCB in bike insurance has certain benefits for both the insurer and the insured. The insurance company will benefit in giving a discount on the premium rather than paying a huge amount of insurance claims; thereby encouraging the insurers to go insurance claim-free and rather claim a bonus on the premium. The policyholder will try to take discounts on premium payments on all the upcoming policies to stay insured rather than to claim insurance once and continue to pay high premiums.
The benefits for the insured or the policyholder in an NCB in bike insurance are as follows:
- First of all, you get to pay lower premiums in the upcoming years for having an active insurance policy
- It is like a reward or a token of appreciation to those who drive safely and take care of their vehicles to avoid insurance claims on damage due to accidents or collisions
- It is easy to transfer and switch NCB in bike insurance in the following ways:
- You can switch from one insurer to another upon renewal and transfer the bonus. NCB in bike insurance belongs to you and not your bike. It’s your reward that you should claim and not a special bonus provision of the insurance companies
- You can also carry forward the No Claim Bonus in bike insurance from the old two-wheeler to a new one. However, you need to inform and submit the relevant documents to the insurer for transfer of the discount
Wrapping it up:
NCB in bike insurance can lighten the burden of premium payments if you go with zero insurance claims. Moreover, the two-wheeler stays undamaged if driven safely and taken care of. Some insurance companies have also come up with an add-on policy of ‘NCB protect’. This policy helps to retain NCB in bike insurance despite an insurance claim. Under this policy, there are certain terms and conditions like the number of years you must not have made any claim and the number of times you claim in the previous year before policy renewal. You can be granted NCB in bike insurance despite an insurance claim under NCB Protect Policy if you do not surpass the allowed number of claims in a year (usually one).