No Claim Bonus in Bike Insurance

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, and insurance 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 applicable to comprehensive two-wheeler insurance plans and 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.

NCB for bike insurance is essential since it saves money on your insurance policy payment. It makes your two-wheeler 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.

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.

In the event of a policy year when no claims were raised, the No Claim Bonus is activated. It is a discount applied exclusively to Comprehensive or Own Damage insurance plans 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.

You can keep your No Claim Bonus on your insurance for 2-wheelers and benefit from and earn the perks indicated below if you did 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. It will allow you to benefit from a reduction ranging from 20% to 50% on your bike insurance premium.

Transferable

The No Claim Bonus is provided to you, the policyholder, and not your insured vehicle. Therefore, you can get your NCB transferred to a new insurance provider or a new vehicle and ensure the continuation of the benefits.

Encourages to drive safely

The NCB discount on bike insurance is provided as a reward for careful driving and avoiding claims despite paying the premium. And the fact that it can be availed up to 50% will encourage you to drive safely and refrain from raising claims.

While you ensure to keep accumulating your NCB in two-wheeler insurance, it is essential that you take the right steps to secure this advantage even when you change your insurance provider or buy a new bike. It will help in maximising the NCB benefits.

Here are a few aspects to consider on your previous NCB bike insurance.

While switching your insurance provider

If you have decided to switch, you need to ensure that you get the NCB certificate with the NCB percentage in bike insurance from your existing insurance provider. It will serve as proof of your accountability in refraining from raising claims until then or the end of the policy term.

While selling your bike and purchasing a new bike

If you are selling your old bike, ensure only to transfer the ownership of your bike to the new owner.

Share proof of this transfer and the sale to your insurance provider.

Upon verification, they will provide an NCB certificate that is valid for up to 3 years.

Provide this certificate to your new bike dealer, and they will incorporate the changes to your new insurance policy.

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.

If you have raised any claim in a policy year, the NCB in bike insurance gets terminated.

The NCB earned will also be forfeited if you fail to renew the policy within 90 days of its expiration date. No NCB implies no longer premium discount.

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

• 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.

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.

Insured Declared Value (IDV)

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 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.

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.

**No Claim Bonus (NCB) **

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.

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 transferable 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.