NCB Protection Add on Cover for Your Two-Wheeler

Posted on: Jun 4, 2024 | 3 mins | Written by: HDFC ERGO Team

NCB Protection Add on Cover for Your Two-Wheeler

Do you remember the feeling you had when you were given awards in school for good conduct? How happy and proud you felt because of that? As an adult, you can experience joy manifold with the No Claim Bonus (NCB).

Whether you own a bike or a car, you are legally required to have valid vehicle insurance. This protects the owner, their next of kin, and any third party involved in an accident from any financial liabilities that may arise due to the accident. But, when you are a responsible driver, the insurance company "rewards" you for that to reinforce safe driving behaviour and make the roads safer. This is done by providing NCB.

Sometimes, you can raise an insurance claim for various reasons, but even one claim can jeopardise your NCB. To avoid that, you can opt for an NCB Protection Add on Cover.

What is the No Claim Bonus?

The provider gives a No-Claim Bonus or NCB to comprehensive bike insurance policyholders who do not file claims during the policy period. This NCB will lower your premium when you renew your policy yearly. Isn't that a win-win situation?

One of the best advantages of NCB in bike insurance is that it belongs to the owner and not the vehicle. Therefore, if you switch providers, the NCB will go with you. Also, if you plan to buy a new bike, your NCB will be added to the new insurance for bikes.

How much is the NCB in bike insurance?

The NCB discount you receive during policy renewal will depend on the years you have gone without making a claim. All insurers have to offer the same IRDAI-approved NCB. For comprehensive bike insurance policies, the NCB starts at a 20% discount for the first claim-free year and can go up to a maximum of 50% if you don't file a claim for five consecutive years.

But even one small claim can take you back to zero.

Here is an example of how NCB can be calculated:

If your bike's premium is ₹10,000, and you have gone a year without a claim, you get a 20% discount during policy renewal. So, now you have to pay ₹8,000.

An important thing to remember here is that NCB does not apply to liability-only third party bike insurance. It is only valid for Own Damage, a component of comprehensive bike insurance.

What is the Protection Add-on Cover?

Now, some situations arise where you have to file for a claim, which will nullify this significant monetary bonus you would have accumulated. NCB Protection Add-on Cover will enable you to raise a claim without sacrificing the no-claim bonus.

You can purchase the NCB Protection Add-on Cover when buying your comprehensive car insurance. A policyholder can make one claim without jeopardising the annual bonus.

Here is an example of how this add-on cover works:

Mr Ram bought the NCB Protection Add-on Cover along with his Comprehensive bike insurance, which amounted to his premium being ₹12,000. Now, he was eligible for a 20% discount during his renewal, when it became ₹10,000. But in the second year, he filed a claim. He would have lost 25% of the NCB, but with this add-on cover, he would only have to pay ₹7500.

Benefits of NCB Protection Add-on Cover

If you are wondering why you should buy this additional cover, then here are a few reasons to convince you:

1. An NCB Protection Add on Cover can be purchased for a bare minimum fee during bike insurance renewal.

2. You can opt to get your bike repaired/serviced at company garages without fearing the loss of NCB.

3. Your NCB remains intact at year's end, even if you make a claim.

4. You can buy the NCB Protection Add on Cover separately, even if you forget to buy it during policy renewal.

Exclusions for NCB Protection Add on Cover

There are some exclusions for the applicability of this add-on cover:

1. Wrong claims are made.

2. Hiding important details or any fraud.

3. Suppose the number of claims is more than what the provider mentions. For example, if your provider offers two claims with the add-on coverage but you make three, then your NCB will reduce to zero.

4. The repair must be done at network garages; otherwise, the NCB protection add-on cover will not apply.

Who should buy an NCB Protection Add on Cover?

The short answer is, everyone!

But if you have a superbike or an expensive one, your IDV and premium will be high. In such a scenario, having the no-claim bonus can help you significantly save on your annual premium. You can also get add-on cover to ensure you don't face significant financial damage, even if you opt for a claim.

Also, if you stay in an accident-prone zone or where flooding is regular, having the NCB protection add-on cover can help you save big bucks.

Conclusion

NCB protection add on cover can help you protect your accumulated NCB discount, which can amount to almost 50% of your annual premium. Most provider allow for 2 claims in a year, but it needs to be opted from a network or authorised garage. Speak to your provider to learn more about it!

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

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