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All About The Role Of IDV and NCB in Purchasing A Bike Insurance

By Juhi Walia
09 September 2022, 5:58 PM

In India, all two-wheelers are required to have a two-wheeler insurance policy. However, rather than simply obtaining it, one must actively seek out all relevant information in order to maximise the benefits of the insurance policy. The Insured Declared Value (IDV) and the No Claim Bonus (NCB) are important considerations for your two-wheeler insurance. So, let’s know more about them below.

All About Insured Declared Value

The IDV of a motorcycle is referred to as the Insured Declared Value. It is an important consideration before purchasing a two-wheeler insurance policy. The policyholder's reimbursement for repair/replacement costs in the event that the motorcycle is totaled is based on the IDV. An agreed-upon amount of insurance will be given to the policyholder by the insurer in the event of a total loss caused by an accident or theft. For instance, if your motorcycle's IDV is INR 50,000, the bike’s insurer will pay a maximum of INR 42,500 in the event of theft. Here’s a catch. The insurers also take into account the depreciation value at the time of claim settlement.

Read more- Impact of IDV on Two-wheeler Insurance Renewal

The Insured Declared value of bike is calculated as follows according to the age of the vehicle. For example, if the age of your bike is less than 6 months the depreciation rate is 5%, similarly if it exceeds 1 year but is less than 2 years, the depreciation rate will be 15%. Other factors that are considered are manufacturing company, make and model of the bike, registration details like city, date of the bike, the ownership of the bike (whether owned by an individual or a corporation), cubic capacity and ex-showroom price of your bike.

Depreciation Rate for Your Bike

Age of the BikeDepreciation %
6 months and below5%
6 months to 1 year15%
1-2 years20%
2-3 years30%
3-4 years40%
4-5 years50%
5+ yearsIDV mutually decided by the insurance provider and policyholder

A Few Things to Take into Account Before Calculating the IDV

1. Always provide an accurate insured declared valuation.

2. The right declaration value will make the bike insurance claims process go more smoothly.

3. Examine the premium cost and see if it has been carefully calculated using your bike's IDV.

4. Ensure that the premium cost is calculated using the IDV. 

Read more - Does it Make Sense To Increase Your Bike's Insured Declared Value (IDV)?

All About No Claim Bonus

An NCB is a premium reduction offered by insurance companies to policyholders who have not made a single claim during the term of their two-wheeler insurance policy. It is applicable during the renewal process.It is an important factor in bringing down the cost of two-wheeler insurance. It is an efficient method of gradually lowering the premium cost.

An NCB in bike insurance can be transferred from one insurance company to another. NCBs are generally given to policyholders based on their good riding history. And, are not policy associated. 

Now for those wondering as to how one calculates the NCB percentage, it is rather quite simple. According to the claim-free years, the Insurance Regulatory and Development Authority of India (IRDAI) has decided the limit of discounts that the insurance provider can offer to the policyholder. The discount percentage increases every consecutive claim-free year. However, on completion of five continuous claim-free years, the discount will stop increasing.

Read more - Benefits of NCB Protection Add-on Cover to Your Bike Insurance

NCB Calculation for Bike Insurance

Claim Free YearsNo Claim Bonus
After 1 year20%
After 2 years25%
After 3 years35%
After 4 years45%
After 5 years50%

Read more - How to Calculate NCB for Two Wheeler Insurance?

The premium discount typically ranges from 20% for the second year to 25% for the third year, 35% for the fourth year, 45% for the fifth year, and 50% for the sixth year. Only if the policy is renewed within 90 days of the previous policy's expiration date is an NCB eligible to be carried forward. The amount of premium that must be paid decreases as the insurance is renewed on a regular basis and the discount increases. The NCB under a two-wheeler insurance policy can be transferred because it relates to the owner and not the vehicle. The original insurance company will provide a "No Claims Certificate" to prove the discount.


You must realize by this point that the NCB and the IDV are both significant factors in determining the cost of bike insurance. Therefore, if you wish to avoid paying an additional fee, it is your responsibility to indicate the right value. You can also ask your insurance company for guidance on the matter. Additionally, pick a coverage that covers your bike's NCB and IDV.


1. How do I calculate the IDV of my bike?

The IDV of a two-wheeler is calculated on the basis of the selling cost of the bike and after deducting the depreciation value. As the bike ages, the IDV keeps decreasing. The formula to calculate the IDV of a bike is as follows: 

IDV= (Listed selling price – depreciation value) + (The cost of bike’s accessories excluded from listed selling price – depreciation value)

2. How does IDV affect my two-wheeler insurance policy overall?

 Your insurance provider will quote you a cheaper two-wheeler insurance premium if your claimed IDV is less than the bike's current market worth. Additionally, the compensation amount will be considerably reduced if you submit a claim for bike theft or constructive total loss, which would result in large losses. In contrast, the insurer will charge you a higher premium if your claimed IDV is greater than the bike's current market worth. Therefore, it is crucial to accurately calculate the IDV and declare the current IDV of your insured two-wheeler.

3. Can I avail NCB on my second-hand bike?

 Absolutely, provided you make use of an NCB transfer certificate and transfer all your accumulated NCB.

4. Can NCB be transferred to the buyer if I wish to sell my bike?

 No, you cannot transfer your accumulated NCBs to the new owner of the bike. However, the existing owner can transfer them from his previous policy to the new bike insurance policy.

5. I have sold my bike to buy a new car, so can my NCB be transferred to the insurance policy of the new vehicle?

No, NCB shall be given only when the vehicle insured is replaced by a new vehicle of the same class and type.

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