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No Claim Bonus in Two Wheeler Insurance
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Don’t we all love rewards? No matter how small they are, they always make everyone happy! A No-Claim Bonus is a reward that you get when you drive safely and do not make a claim under the insurance plan. The discount that you get in the form of NCB surely is a feel-good factor for every policyholder.
What is No-claim Bonus (NCB) in Two Wheeler Insurance?
No Claim Bonus, often known as NCB, is a bonus that you get from your two-wheeler insurance company when you do not raise a claim during a policy year. From the first year of renewal itself, you can avail a discount of 20% that further goes up to 50% in the coming years for ‘own-damage’ premium amount. In most cases, about 80% share of the total premium of your comprehensive policy is towards own-damage. Imagine saving up to 50% of that own damage premium.
An example would help in understanding this situation better. Let’s say you recently bought bike ‘A’ after selling-off bike ‘B’, which you bought in 2016. Supposing that you haven’t made a claim in the past, by now you would have roughly collected 45% of NCB benefit. If you had to pay INR 5,000 as the own-damage premium of your new bike, you could avail a discount of 45% and end up paying INR 2,750 instead.
Is NCB Important in Two Wheeler Insurance?
As discussed earlier, NCB acts as a prize or reward that you get from your two wheeler insurance company for not raising a claim during the policy period. A 20% discount on the OD premium amount can make a considerable difference and you end-up saving all the more in the long run.
Features & Benefits of No Claim Bonus
A No Claim Bonus can provide you with the following benefits:
- NCB is like a reward that you get for being a safe and cautious driver.
- You can reduce your OD premium amount from almost 20% to 50%.
- NCB belongs to you, so even if you sell your vehicle, you can retain the accumulated bonus.
- Transferring the NCB from one vehicle to another is a simple and easy procedure.
How NCB is Calculated in Two Wheeler Insurance?
Under the guidelines of the IRDA, the percentage of no claim bonus that can be availed for a number of claim-free years has been fixed. This rate is followed across all insurance companies that offer two-wheeler insurance.
The table given below shows the NCB Discounts:
| Tenure of the Policy | Percentage of NCB that can be Availed |
|---|---|
| 1st Claim-Free Year | 20% |
| 2nd Claim-Free Year | 25% |
| 3rd Claim-Free Year | 35% |
| 4th Claim-Free Year | 45% |
| 5th Claim-Free Year | 50% |
NCB Protection Cover as Two Wheeler Insurance Add-on
Even if you are an excellent rider, it may not always be possible to avoid an accident. Your bike may sustain damage due to someone else’s fault or may be due to a natural or man-made disaster. Under such circumstances, NCB Protection Cover can help you save the accumulated NCB.
What is NCB Protection Cover and How to Avail it?
To make their comprehensive insurance policy attractive and exhaustive, insurer companies offer the No Claim Bonus Protection add-on. As the name suggests, this rider helps you protect your NCB, even if you make a claim during the policy period. However, keep it mind that there is a specified number of claims that you are allowed to make if you wish to avail the NCB Protect cover. Most companies let you make 2 claims within this cover.
Cost of Availing NCB Protection Cover
The cost of adding the NCB Protection Cover differs between companies. You would surely have to pay a little extra, but this add-on can help you sustain your NCB, even if you need to make a claim in an emergency.
How to Transfer NCB?
NCB belongs to you, not your two-wheeler. So, if you want to sell your bike, you do not worry that you would lose out on the accumulated NCB.
Let us see how you can transfer your NCB for two-wheeler:
From Old to New Insurance Company
When you shift to a new insurance company, your old insurance company would issue you an ‘NCB Transfer Certificate’ on your request. You can submit this certificate, along with other documents (listed below), if asked by the new company. You would thus be able to avail the discount.
From Old vehicle to New vehicle
If you have accumulated NCB on your two-wheeler that you wish to sell, relax, you can retain the bonus. As a policyholder, the NCB has linked to you, not your vehicle.
Documents Required to Transfer NCB
The following documents will be required when you transfer the NCB:
- NCB Transfer Certificate, from the prior insurer.
- Form 29 and 30 - Buyer/Seller Agreement.
- Copy of previous Policy Papers.
- Delivery Note by the new buyer to get the NCB Transfer Certificate.
NCB at the Time of Two Wheeler Insurance Policy Renewal
Your NCB comes handy at the time of renewal of your two-wheeler insurance policy. Depending on the number of claim-free years, you get a discount that can range between 20% to 50%, it can have a significant influence on the Own-Damage premium amount.
Reasons Why Your NCB can be: Cancelled/Terminated/Not Available
The reasons why your No Claim Bonus may get rejected are listed below:
- If you do not have a comprehensive bike insurance policy or standalone own-damage policy.
- When you make a claim.
- If you do not renew your expired policy within a period of 90 days.
Points to Remember About NCB in Two Wheeler
- It should be noted that no claim bonus is a special feature of comprehensive insurance or the standalone own-damage policy, it would not be available with third-party liability two-wheeler insurance plan.
- If you file for a claim, the NCB benefit for the upcoming renewal will get cancelled.
- Another scenario, when your NCB gets terminated is when you do not renew an expired policy within 90 days from the date of expiry.
- The NCB is associated with you, not your vehicle. So, even if you plan to sell a car/bike on which you have some accumulated NCB, you can easily retain the bonus.
- When selling your old two-wheeler make sure that you transfer only the ownership. Keep a copy of the new entry for future reference.
- It is recommended that you try to retain the insurance company unless extremely necessary. This way you can easily warm as much bonus as possible.
- Protect your NCB by not raising small claims. Try to raise a claim only when the cost of repair is too high.
- You have to make use of the ‘NCB Transfer Certificate’ within 3 years, so transfer the bonus to your new bike/vehicle soon.
Add ons for your Two Wheeler Insurance
No Claim Bonus in Two-wheeler Insurance FAQs
1. Can I get NCB for more than two bikes or vehicles?
No, NCB is applied to only a single vehicle at a time. Nevertheless, you can transfer the NCB from your old vehicle to a new one, but not both of them at the same time. If you have 2 bikes or vehicles and they run on 2 different policies then the NCB for each vehicle will be different and will be accumulated separately.
2. When will my two wheeler NCB expire?
You can lose out on your NCB in the following cases:
- When you make a claim, you lose your accumulated NCB
- If you do not renew your expired policy within a period of 90 days
- When you do not have a No-claim bonus protection add-on cover
3. Will my NCB protection cover still remain valid, if I make a claim?
NCB Protection add-on benefit helps you retain your claim even when you make a claim, however, different insurance companies apply different terms and conditions to this add-on. Therefore, it is recommended that you confirm the same from your insurance company.
4. Will I lose my NCB at the time of policy renewal?
No, rather it is at the time of renewal that the accumulated NCB would act as a discount on the renewal of OD premium amount.
5. How much discount can I get in my premium with NCB?
The NCB that you get gradually grows after every claim-free year. For the first year that you don’t make a claim, you can avail a 20% discount on the renewal premium. The discount goes up to 50% in the 5th claim-free year.
6. Can I get NCB, if my policy has expired?
If you renew the expired policy within 90 days from the date of expiry, you can claim the accumulated bonus. After 90 days of lapsed policy, you won’t be able to fetch the benefits.
7. How does the maximum number of claims affect my NCB?
When you make a claim, you finish-off the NCB, however, different insurance companies apply different terms and conditions to the number of times you can make a claim. Therefore, it is recommended that you confirm the same from your insurance company.