No Claim Bonus in Bike Insurance
Bikes are a convenient way to surf through the jammed Indian roads. While this is true, several studies also suggest that motorbikes carry a greater risk of accidents. According to a report, six two-wheeler riders die every hour in India. The same report also suggests that bikes and pedestrians make 54% of accident-related deaths in the country.
Let us understand what makes no claim bonus an important part of the policy.
Considering this, riders of two-wheelers need more than a helmet to protect them from unforeseen circumstances. No wonder the Government of India has made it mandatory for bike owners to have a two wheeler insurance policy. Such a policy provides cover against events that can lead to a financial drain. This includes loss or damage caused to your bike under various circumstances, as well as loss or damage to a third party by your motorbike. Tata AIG offers comprehensive two wheeler insurance that covers it all.
When buying bike insurance, it is natural to have several questions. One of the most common questions asked is about the No Claim Bonus (NCB). So, what is NCB in bike insurance? Read on to find out.
What is No Claim Bonus (NCB)?
Did you know your two wheeler insurance policy carries a reward for following rules and riding well? Yes, it does.
You might not always have a claim to raise with your insurance provider. Those who take good care of their bikes, ride safely, and do not take any wrong advantage of their policy usually have no claims to make. If you are one of them, then in such cases, you can avail of a No Claim Bonus in bike insurance.
NCB is a reward for raising no claims. In fact, it is one of the factors of a two-wheeler policy that motivates bike owners to stick to maintaining their bikes and avoid rash driving. It is essentially a discount that you get on your insurance premium when you renew your policy.
You can receive up to a maximum of 50% discount on premiums for not raising any claims over consecutive years. You can get this only if you do not make any claims for five consecutive years. Make sure your two-wheeler is in good condition through regular servicing, maintenance, and safe riding to take advantage of this feature of your bike insurance policy.
How No Claim Bonus in Bike Insurance is Calculated?
Now that you have understood what No Claim Bonus is in bike insurance, you might be wondering how it works. The Insurance Regulatory and Development Authority of India (IRDAI) has set guidelines and percentage of NCB an insurance company can offer policyholders for every consecutive claim-free year.
The NCB is capped at 50% after five claim-free years. The NCB typically comes with a comprehensive bike cover.
If even a single claim is raised, your No Claim Bonus will reset to ZERO.
What are the Benefits of No Claim Bonus in Two-Wheeler Insurance?
Let us understand what makes no claim bonus an important part of the policy and the benefits you can reap from it.
- Encourages Safe Riding: One of the major reasons why no claim bonus is important is that it promotes safe riding practices. It is no secret that riding safely equals better maintenance of your motorbike and no yearly claims.
No Claim Bonus or NCB is a reward for making no claims during your policy period. You get a certain amount of discount for the premium to be paid on renewal when there are no claims made. It is an element that insurers can use to encourage policyholders to follow safe riding practices and adhere to traffic rules.
Helps Reduce Premium: No claim bonus is not only beneficial for your well-being but also carries financial advantages. You can redeem your No Claim Bonus at the time of policy renewal and take advantage of a lower premium. Even if you plan on selling the bike and purchasing a new one, you can use the acquired NCB to get two-wheeler insurance renewed at a reduced rate.
Easily Transferable: While the NCB is attached to the two-wheeler you own, it belongs to you. It is a reward to you for being a good driver. As a bike owner, when you raise no claims on your policy, the NCB is yours to use.
Thus, the bonus amount is transferable. If you wish to shift to a new insurer, you can transfer the amount of NCB earned from your existing insurer at the time of renewal. Depending on your insurer, there might be certain terms and conditions that you have to follow.
You can also transfer your NCB if you are changing your vehicle and buying a new one. The NCB earned on the old bike can be transferred to the bike insurance policy of your new ride.
Tata AIG also allows the NCB transfer in the event of the death of the insured. In such cases, the reward can be transferred to his or her legal heir/nominee.
Receive up to 50% off on Premium: As mentioned before, IRDAI has set a fixed percentage of NCB for every consecutive claim-free year. It starts from 20% and goes up to 50%, which is the maximum cap or limit you can get at the end of five claim-free years. So, after the fifth consecutive year of raising no claims, you will only have to pay half the premium on renewal of your policy.
We hope you got your answer to what is no claim bonus in bike insurance. Take advantage of this feature by driving safely and keeping your bike in good condition. If you haven’t covered yourself with two-wheeler insurance, get one from Tata AIG today!