No Claim Bonus (NCB) in Two-Wheeler Insurance

NCB stands for No Claim Bonus. A two-wheeler policyholder is eligible for this benefit if they do not register any claim in the previous policy period. For this reason, sometimes the policyholder decides to bear the expenses of repair of the bike on their own instead of filing a claim with the insurance company. In such a scenario, they are eligible for NCB, which is a percentage concession on the renewal insurance premium amount. This markdown is applicable on the 'Own Damage Premium' component of the insurance plan and usually ranges between 20% and 50%.

What is NCB in Bike Insurance?

NCB insurance full form stands for No Claim Bonus, which is a reward offered by insurance providers to policyholders who do not make any claims during their policy tenure. It is essentially a reduction on the renewal premium, applicable to the Own Damage (OD) component of your insurance. This reward starts at 20% after one claim-free year and can go up to 50% after five consecutive claim-free years, making it a significant cost-saving factor for responsible riders. The key to understanding the value of NCB lies in its long-term benefits. Imagine consistently maintaining a claim-free record; not only does this demonstrate your responsible riding habits, but it also translates to substantial financial savings. The reward system ensures that careful riders are recognised and encouraged to continue their safe practices. Additionally, NCB is transferable, meaning even if you switch insurers or upgrade to a new vehicle, your accumulated bonus travels with you, preserving your benefits. This feature is especially useful when you compare car insurance policies to ensure you retain your accumulated bonus.

Importance of NCB for Bike Insurance

The No Claim Bonus (NCB) is an important aspect of bike insurance as it directly impacts the cost of your premium. Here's why it's crucial:

1. Premium Discount: NCB offers a significant discount on your bike insurance premium, which can range from 20% to 50%, depending on the number of claim-free years. This helps reduce the overall cost of renewing your policy.
2. Encourages Safe Riding: NCB motivates riders to be more cautious and responsible on the road, reducing the chances of accidents or claims. It rewards careful driving and discourages reckless behavior.
3. Incentive for Policyholders: For those with a good claim history, NCB is a great financial incentive that reduces the burden of high premiums in subsequent years.
4. Long-Term Savings: The longer you maintain a claim-free record, the higher the discount, leading to substantial savings over time.
5. Improved Policy Benefits: NCB helps in building a good relationship with the insurance company, ensuring smoother policy renewals with reduced costs.

How Does NCB Work?

The meaning of NCB in insurance lies in its reward mechanism for responsible policyholders. For instance, if you maintain a claim-free year, you are eligible for a 20% deduction on your OD premium during renewal. With two claim-free years, this increases to 25%, and so on, until a maximum of 50% is reached after five years. However, filing a claim resets this progression, so minor damages are often better managed out of pocket. Consider this example: A rider with an OD premium of INR 15,000 would save INR 3,000 with a 20% NCB after the first claim-free year. By the fifth year, the savings grow to INR 7,500 with a 50% NCB. This progression highlights the importance of maintaining a claim-free record. However, it is equally important to evaluate whether filing a claim is worth losing the accumulated NCB. For minor repairs, it might be more economical to bear the costs independently.

Why is NCB important for two-wheeler insurance?

The NCB in two-wheeler insurance is a cornerstone of cost-efficient bike insurance. Here’s why it matters:

1. Premium Reduction: With reductions ranging from 20% to 50% on the OD component, NCB significantly lowers renewal premiums.
2. Encourages Safe Riding: NCB acts as an incentive for careful driving, reducing the likelihood of accidents and claims.
3. Long-Term Savings: Accumulating NCB over multiple years leads to substantial financial benefits, ensuring affordability for long-term insurance coverage.
4. Flexibility: NCB is transferable, allowing policyholders to carry forward their bonuses when switching insurers or purchasing new bikes.

The importance of NCB extends beyond mere financial savings. It promotes a sense of accountability among riders, encouraging them to prioritise safety and responsibility. Additionally, the flexibility to transfer NCB ensures that policyholders are not penalised for upgrading their vehicles or switching insurers, making it a truly rider-friendly feature. For reliable and customer-centric two-wheeler insurance solutions, consider exploring options from Bajaj Allianz General Insurance Company, ensuring your riding experience is financially secure and hassle-free.

What Is NCB Protection Add-On Cover in Bike Insurance?

An NCB Protection Add-On cover is a feature that allows policyholders to retain their accumulated bonus even after making a claim. This add-on is particularly beneficial for minor accidents or damages that require filing a claim without forfeiting your NCB benefits.

Key Benefits

1. Retention of NCB: Ensures that one or more claims do not reset your accumulated NCB.
2. Financial Security: Provides peace of mind for unexpected damages, allowing policyholders to file claims without worrying about losing discounts.
3. Cost-Effective: While this add-on increases the premium slightly, it safeguards long-term savings by preserving your bonus.

For instance, if you have a 50% NCB and make a small claim, the add-on will ensure that your bonus remains intact during renewal, making it a valuable investment for cautious riders. Opting for an NCB Protection Add-On is especially useful for those who prioritise financial security and flexibility. By safeguarding your bonus, this add-on ensures that even in unforeseen circumstances, your long-term savings remain unaffected. Riders who frequently commute in high-traffic areas or regions prone to minor accidents will find this feature particularly advantageous.

Benefits of No Claim Bonus in Bike Insurance

No Claim Bonus (NCB) is one of the most significant benefits offered by bike insurance providers. It is a reward for policyholders who have not made any claims during the previous policy term. The following are some of the benefits of NCB:

1. Concession on premium

Policyholders who have a good driving record and have not made any claims during the previous policy term are eligible for a markdown on their premium. The rate of concession increases with the number of claim-free years.

2. Higher savings

NCB helps policyholders save money on their premiums, which can be used for any purpose they wish.  These savings can be used for other expenses for your car or make investments in different avenues.

3. Easy renewal

Policyholders who have NCB can easily renew their policy without having to go through the lengthy process of filling out forms and providing documentation.

Impact of NCB Discounts on Premium Calculation

No Claim Bonus (NCB) can have a significant impact on the calculation of premiums for bike insurance. NCB is a reward offered to policyholders who have not made any claims during the previous policy term. The percentage of the benefit increases with the number of claim-free years. For example, if a policyholder goes for a consecutive five years without making any claims, they may be eligible for a 50% concession on their premium. These savings can bring down the overall cost of the policy, thus, making it more affordable for policyholders who have a good driving record. Also Read: 9 Common Mistakes to Avoid When Renewing Bike Insurance

How to Check NCB in Bike Insurance?

1. Policy Document: Review the breakdown section in your insurance policy to find the applicable NCB.
2. Insurance Provider: Contact Bajaj Allianz General Insurance Company's customer care team through their toll-free number or email to inquire about your claim history and the applicable NCB percentage.
3. NCB Certificate: Request an NCB certificate when switching insurers to transfer your bonus.

How to Calculate NCB for Bike Insurance?

The calculation of the NCB is done as shown in the table below:

Things to Remember About NCB in Bikes

1. NCB becomes nil in case the policyholder files a claim.
2. NCB can be transferred to the new vehicle in case of substitution of the vehicle of the same class.
3. The validity of NCB is 90 days from the date of expiry of the policy. Therefore, you should renew the two-wheeler insurance policy in time to avail of this benefit of NCB.
4. NCB can be utilized within three years when the existing vehicle is sold and replaced with a new vehicle.
5. NCB recovery can be done in case of a name transfer on the RC of the vehicle.

Two-wheeler insurance is an important investment for every bike owner. Opt for online 2-wheeler insurance as it is quick and hassle-free. Also Read: How To Check Bike Insurance Policy Status Online

How to Transfer NCB to New Bike Insurance?

Transferring your NCB in two-wheeler insurance is simple:

1. Obtain an NCB certificate from your current insurer.
2. Provide the certificate and policy details to the new insurer.
3. Ensure the transfer is completed within 90 days of your previous policy’s expiry.

Documents Required for Transferring NCB

To transfer your NCB insurance full form to a new policy, you’ll need:

1. NCB certificate from the previous insurer
2. Copy of the previous policy
3. Vehicle registration certificate
4. Identity proof (if required)

FAQs on NCB in Bike Insurance

1. What is a No-Claim Bonus (NCB)?

NCB is a reward offered to policyholders who have not made any claims during the previous policy term. It is a reward for, essentially, being safe on the road and maintaining a good driving record.

2. How is the No-Claim Bonus calculated?

The NCB is calculated as a percentage of the own-damage premium. The percentage increases with the number of claim-free years. For example, if a policyholder gets the NCB benefit, they receive a concession of 20% on their own-damage premium. If they do not make a claim for five consecutive policy years, this rate increases to a maximum of 50%.

3. Is NCB transferable from one bike insurance policy to another?

Yes, NCB is transferable from one Bike Insurance Policy to another. Policyholders can carry forward the NCB discount to their new policy.

4. Can I claim NCB if I have made a claim during the previous policy term?

No, NCB is only available to policyholders who have not made any claims during the previous policy term.

5. Can I get NCB for second-hand bike?

To get NCB benefits for a second-hand bike, you will have to ask your insurance provider for the NCB retention certificate.

6. Can I use the NCB for more than two vehicles or bikes?

Yes, you can use your NCB on multiple vehicles, provided you have separate insurance policies for each vehicle. The NCB can be transferred individually for each bike or vehicle, depending on the insurer's terms.

7. Can I transfer the NCB when I purchase a new bike?

Yes, you can transfer the NCB to a new bike, provided you are purchasing the new bike within a certain period (usually within 90 days) from the previous policy's expiry. You will need to submit your previous policy details to your new insurer.

8. Does NCB expire?

Yes, NCB expires if there is a break in the continuity of your insurance policy. To retain your NCB, you must renew your policy before the grace period ends, typically within 90 days of the policy's expiry date. Failure to do so will reset the bonus.

9. What are the NCB transfer rules?

NCB is transferable between insurance providers and vehicles, provided certain conditions are met. The transfer must be initiated within 90 days of the previous policy’s expiry, and you need to present an NCB certificate from the previous insurer to retain the accumulated bonus.

10. Do I lose my NCB if someone hits my bike?

If your bike is hit by someone else, and the damage is claimed through their insurance, you will not lose your NCB. However, if you claim from your own insurance, the NCB may be affected.

11. How long is no claim bonus valid?

The validity of the NCB is usually one year. If you don’t renew your insurance policy before the expiry date, you may lose the NCB.

12. What is the maximum withdrawal from NCB?

The maximum NCB discount can range from 20% to 50%, depending on the number of claim-free years you have. The more years without a claim, the higher the NCB discount.

13. How is no claim bonus calculated?

NCB is calculated based on the number of consecutive claim-free years. Generally, after each claim-free year, your discount increases in increments (e.g., 20% after one year, 30% after two years, and so on).

14. Is it possible to avail of NCB for my second-hand bike?

Yes, you can avail of NCB for a second-hand bike by obtaining an NCB retention certificate from the previous insurer. This document confirms the claim-free history of the bike's previous policy, allowing you to transfer the accumulated bonus to your new policy.

15. What causes the loss of NCB?

The loss of NCB occurs primarily when you file a claim during the policy term. Additionally, failing to renew your bike insurance policy within the stipulated grace period will result in forfeiture of your accumulated bonus, resetting it to zero.

16. How to select NCB in two-wheeler insurance?

To select NCB, opt for a policy that includes an NCB Protection Add-On. This add-on ensures your bonus remains intact even after minor claims. Alternatively, avoid filing claims for small damages to preserve your NCB and maximise future savings.

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*Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.