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All you need to know about No Claim Bonus (NCB) in bike insurance

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Published on August 11, 2020. EST READ TIME: 5 MIN

A bike insurance policy would help in protecting your bike against any unprecedented incident that would lead to huge expenditure. With Timely payment of insurance premium, the insurer would bear the expenses in case of any damages caused to your vehicle.

While purchasing bike insurance, one of the major factors to be considered is the policy premium. Several factors affect your bike insurance premium amongst which No Claim Bonus plays a vehement role in lowering your bike insurance premium.

What is No Claim Bonus?

No Claim Bonus (NCB) is a discount or savings on the premium, which is offered by the insurance provider if you have not taken any insurance claims during the term of the policy. The premiums for insurance tend to rise with factors such as inflation, rise in the cost of repair, etc. So, during the renewal of the policy, if you are eligible to avail the NCB, your premium amount can be considerably brought down or you can even increase your sum assured if the existing sum assured seems insufficient.

Benefits of NCB in bike insurance

The major benefits of the NCB in bike insurance can be listed below.

• An incentive like the NCB motivates you to drive your bike very safely on the roads by following all traffic rules properly.

• The most important perk of the No Claim Bonus is if you are shifting from one insurance provider to another during the renewal, then you can carry the NCB along with you.

• NCB helps in reducing the bike insurance premium. In case, you are planning for the purchase of a new bike by exchanging your old bike, then you can easily avail the NCB acquired on the old bike while the purchase of the insurance for a new bike.

How is No Claim Bonus calculated?

According to the slab of IRDAI, the NCB discount percentage is fixed for each year of policy renewal.

Year	No Claim Bonus Discount
First claim-free year	20%
Second consecutive claim-free year	25%
Third consecutive claim-free year	35%
Fourth consecutive claim-free year	45%
Fifth consecutive claim-free year	50%

Suppose, the Insured Declared Value (IDV) of your bike is Rs. 1 lakh and you are paying an annual premium of Rs. 15,000 annually. If no claim has been made during the first year of the policy term, the NCB earned would be 20% of the annual premium. So, by this, you would be paying an annual premium of Rs. 12,000 instead of Rs. 15,000.

When the NCB can be terminated?

NCB can be terminated under the below-mentioned conditions.

• If you have made a claim during the policy year, then you would not be able to avail any discount on the insurance premium for the next year’s bike insurance policy premium.

• If you have not renewed your bike insurance policy within 90 days from the actual date of the expiry of the bike insurance policy.

Few things to keep in mind

A few important points need to be kept in mind while deciding on the NCB for your bike insurance.

• You would not be able to share the discounts earned from NCB between two different policies. It can be used only one insurance policy at a time.

• NCB is not available on the third party cover, but is available only on the Own Damage component.

• You should try not to make insurance claims for minor damages to your bike to avail of the benefits of NCB. You can also opt for an NCB protect add-on cover, which would allow you to avail the NCB even if claims are being made.

Conclusion

Hence, if you have a motive of saving some amount of the premium, then you must drive carefully and avoid making claims on your bike insurance policy. By this, you can utilise your NCB benefits and obtain maximum coverage from your insurance policy as well.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

This blog has been written by

Mukesh Kumar | Motor Insurance Expert | 36+ years of experience in insurance industry

A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.

Mr. Mukesh Kumar recommends "getting your two wheeler insured from HDFC ERGO, a brand serving more than 1 crore+ customers. With overnight repair services and more than 6,800+ network garages, you can be assured of help in event of any damage to your vehicle

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