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No Claim Bonus (NCB) in Two Wheeler Insurance
Feb 21, 2023

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%.

Why is NCB important?

NCB plays an important role in lowering the two-wheeler insurance OD premium amount. It is a great way to progressively save on the premium during two-wheeler insurance renewal as the percentage of this bonus increases with consecutive claim-free years.

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.

The 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.

How is the No Claim Bonus calculated?

The calculation of the NCB is done as shown in the table below:
20% markdown on OD Premium No claim made or pending during the preceding full year of insurance
25% markdown on OD Premium No claim made or pending during the preceding 2 consecutive years of insurance
35% markdown on OD Premium No claim made or pending during the preceding 3 consecutive years of insurance
45% markdown on OD Premium No claim made or pending during the preceding 4 consecutive years of insurance
50% markdown on OD Premium No claim made or pending during the preceding 5 consecutive years of insurance

Here are some points about NCB that the two-wheeler policyholder should keep in mind:

  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.

Frequently Asked Questions on No Claim Bonus (NCB)

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.   Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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