How to Calculate NCB for Bike Insurance in India

  • Author :
  • TATA AIG Team
  • Published on :
  • 26/09/2023

Although 33% of Indian families possess a two-wheeler, just a small number of these owners make claims each year. This is a good indication! It reflects the fact that the majority of two-wheeler riders take care of their vehicles. If you ride safely, your insurance company benefits as well, since they do not have to pay out major claims.

As a reward, the insurance company will offer you a discount on your renewal premium of your bike insurance policy known as the No Claim Bonus (NCB).

Continue reading to learn about NCB in bike insurance.

NCB in Bike Insurance: Meaning Explained!

The NCB full form in bike insurance is the No Claim Bonus. It is an incentive, in the form of a discount on policy premiums,n isurance providers grant customers who do not file claims throughout the policy period.

NCB is a percentage reduction on the renewal premium of the year or years succeeding your claim-free years. It is important to note that the discount is not available on the entire premium amount, just the own-damage component of your total premium.

The NCB discount can go up to 50% after five consecutive non-claim years. So, take good care of your motorcycle by scheduling regular maintenance and riding safely to avoid damage. Also, avoid filing small claims. Compare the claim benefit versus the NCB benefit and choose to save the higher amount.

Importance of NCB for Bike Insurance

NCB for bike insurance is essential since it saves money on your insurance policy payment. It makes your bike insurance policy progressively cheaper, as you receive a reduction on the insurance premium upon policy renewal after claim-free years.

At the end of five consecutive claim-free insurance periods, this might amount to a 50% decrease in policy premiums. As a result, you may lower your bike insurance costs and save your hard-earned money.

How to Calculate NCB for Bike Insurance?

You may wonder how to calculate NCB for bike insurance. The Insurance Regulatory and Development Authority of India has defined the discounts insurance firms can provide to the insured based on claim-free years. The proportion of the discount grows with each subsequent year of no claims. The discount, however, will stop increasing after five consecutive claim-free years.

NCB Percentage in Bike Insurance

Claim-Free Year No Claim Bonus Discount (%)
After the 1st Year 20%
After the 2nd Year 25%
After the 3rd Year 35%
After the 4th Year 45%
After the 5th Year 50%

No Claim Bonus: How Does It Function?

In the event of a claim-free year, the No Claim Bonus is activated. This discount applies exclusively to Own Damage insurance and is not intended for Third Party Liability insurance. Every year, the rate of the No Claim Bonus increases by 5% for each claim-free effort you make. Let us illustrate this using an example:

Assume you have bike insurance with an Insured Declared Value of ₹1 lakh and a premium of ₹6,000 (of which the own-damage component is ₹4500) per annum. If you did not file a claim in the first year, the NCB received upon renewal is 20% of the OD part of your annual premium. If you apply this to your successive year premium, you pay ₹5100 (₹900 discount on OD premium) rather than ₹6000 after deducting the 20% NCB incentive on the premium. After five successive claim-free years, you get a discount of 50%, bringing your premium down to ₹3750.

Benefits of NCB for Bike Insurance

You can keep your No Claim Bonus on your insurance for 2-wheelers and earn the perks indicated below if you do not file any claims throughout the policy period:

Helps in Reducing Premium

If you do not file a claim during the insurance period, you will be given the NCB as a reduction when you pay your renewal payment. As a result, you may take advantage of the financial benefits it provides upon policy renewal. It may motivate you to drive cautiously and follow traffic regulations.


The No Claim Bonus you receive for driving carefully and without filing a claim is yours. As a result, if you change insurance companies, it may be transferred to the new company, and you can continue to enjoy its benefits.

How to Check NCB in Bike Insurance?

If you’re wondering how to check NCB in bike insurance, let us tell you that you can find NCB in your bike insurance policy copy's own damage premium calculation section. After each claim-free year, you will be eligible for a higher NCB and relocated to the next higher slab. In your insurance text, the NCB will be stated as a percentage.

A Little Bit of Advice Regarding No Claim Bonus

When opting for NCB in bike insurance, remember the following points:

  • Never forget to renew your insurance coverage on time. The NCB earned will be forfeited if you fail to renew the policy within 90 days of its expiration date. No NCB implies no longer premium discount.

  • You cannot combine the discounts gained from two distinct policies. It can only be applied to one policy at a time.

  • If you terminate your two-wheeler coverage before the end of its term, the NCB earned for that year may be lost.

  • If you wish to transfer your NCB from old two-wheeler insurance to a new two-wheeler policy, you must submit an NCB retention letter to the insurance provider.

IDV and NCB in Bike Insurance

Insured Declared Value (IDV) and No Claim Bonus (NCB) are two of the most critical terminologies in motor insurance and can confuse new policy buyers. Let us look at what IDV and NCB are in bike insurance.

The cost of your bike insurance premium is directly related to the Insured Declared Value (IDV). It is the highest sum insured amount that a car insurance provider will pay to the policyholder when the claim is filed. This figure, comparable to the two-wheeler's market value, was set by the insurance carrier and will fluctuate at the time of policy renewal.

In essence, it is the current market worth of your two-wheeler. If your 2-wheeler is deemed a total loss, your insurance will offer compensation equal to the IDV of your 2-wheeler.

The formula for calculating the IDV is as follows:

Manufacturer's advertised selling price - depreciation amount.

Non-factory installed accessories are priced individually. All of these elements influence the rate of your bike insurance policy, and this knowledge will assist you in obtaining the best bike insurance quote.

A No Claim Bonus is accumulated yearly, and the discount is earned according to the number of claim-free years. Insured members with a clean driving record can get up to a 50% NCB discount.

The IDV and NCB are two critical components of any two-wheeler insurance policy. The Insured Declared Value of a two-wheeler is fixed when the insurance coverage is renewed or purchased. The sum assured value is calculated using the two-insured wheeler's declared value after subtracting depreciation on its parts.

If the two-wheeler's age is over five or the bike has become obsolete, its IDV may be mutually declared between the insurance carrier and the insured individual.

Wrapping Up

So, if you want to save money on your premiums, remember that a No Claim Bonus awaits you on the other side of self-control. It's also worth noting that this discount is transferrable to new two-wheelers and new insurance providers. So, drive safely, file no claims until necessary, and keep collecting the no-claim advantages! This way, you can maximise your NCB and enjoy low-cost yet comprehensive insurance for 2-wheelers.

At Tata AIG, we offer a range of two-wheeler insurance policies at affordable rates to help you protect your bike and yourself financially. You can also opt for add-ons or riders to enhance your two-wheeler’s safety by paying a bit extra. So, compare two-wheeler insurance policies by visiting our official web portal and choosing the one that best meets your needs and budget effectively.

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Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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