Currently, there are over 21 crore two-wheelers in India. (Source: Business Standards) Yet, not even half are insured. As alarming as this statistic sounds, this brings our attention to the importance of having two-wheeler insurance in India. Having a two-wheeler insurance not just safeguards our vehicles against the damages it may incur but it also provides us with a safety net protecting us against any unforeseen financial expenses. However, we understand that insurance premiums can sometimes be quite expensive to bear. This is where NCB in bike insurance can act as a boon for you.
NCB is a well-known element of the bike insurance industry. The major goal is to provide savings in the form of bonuses to insurance holders who have maintained a claim-free status during the policy’s term. Although a number of factors affect how much your bike insurance will cost, NCB, or No Claim Bonus acts as a primary factor in reducing your bike insurance premium.
What does no claim bonus in bike insurance signify?
When referring to bike insurance, the term “NCB” stands for a reduction in premium that an insurer might offer if you ride your bike safely and file no claims throughout the course of the policy. Hence, make sure to go for routine maintenance on your bike and try to avoid any kind of damage by riding cautiously.
In simple terms, No Claim Bonus is an incentive to encourage safer driving. It’s a reward that insurance companies offer to encourage drivers toward exercising caution while driving. As safe driving results in no claims, in return, insurance companies offer the insurance holders a benefit known as an NCB bonus, which can be redeemed by paying a lower bike insurance premium while policy renewal.
Benefits of NCB in bike insurance
We’ve listed three of the most significant benefits of NCB in bike insurance, which are as follows:
- Easy to transfer: You are the sole owner of the NCB you receive for driving safely and not making a claim throughout the policy period. Hence, if you choose to switch insurers, your NCB can be transferred to your new insurance provider, where you can start benefiting from it.
- Helps in premium reduction: If you do not submit a claim during the policy period, the NCB is offered as a discount in your premium while renewing the policy. Therefore, you can access your NCB discount in the form of discounted premiums, when you renew your policy.
- Encourages safe driving: The No Claim Bonus is a token of appreciation from your insurer provider. As a result of their passion for obtaining this NCB discount each year, every bike rider gradually enhances their driving skills and develops into a responsible driver.
How NCB is calculated in bike insurance?
You are only eligible to benefit from NCB in bike insurance, if you haven’t made any claims in your previous policy year. So, now when you renew your policy next year, you will have to pay a discounted premium which will be generated due to last year’s NCB discount.
The discount account by the end of the first year will effectively continue to the next year. The entire discount that had accrued by the end of the second year will be carried over to the third year, and so on. A yearly calculation is done while the policy is in effect. The table below demonstrates the same:
| Year without claims | NCB discount |
| 1st year | 20% |
| 2nd year | 25% |
| 3rd year | 35% |
| 4th year | 45% |
| 5th year | 50% |
The NCB discount increases with each year you don’t make a claim. The maximum NCB discount goes up to 5 years, beyond that there’s no provision for NCB benefit.
How NCB reduction takes place on bike insurance premium calculation?
Let’s take an example to understand how NCB in bike insurance helps in reducing your insurance cost premium.
Both Mr. Singh and Mr. Patel bought the same bike of the same make, model as well as the brand. They each paid ₹15,000 for their first year of bike insurance. The second year’s premium was lowered to ₹13,00 due to a decline in the value of the bike.
During the first year of his insurance period, Mr. Singh didn’t register a claim; nevertheless, Mr. Patel got involved in an accident and had to submit a claim for damages. As a result, Mr. Singh enjoyed a 20% NCB discount on the second-year premium (no claim renewal), whereas Mr. Patel did not because his NCB was zero.
| Calculation of Premium | Mr. Singh | Mr. Patel |
| Premium for the 1st year | ₹15,000 | ₹15,000 |
| Premium for the 2nd year | ₹13,000 | ₹13,000 |
| Premium amount after NCB reduction | ₹10,400 (20% NCB) | ₹13,000 (0% NCB) |
Important things about NCB in bike insurance
Some of the most important things you should be aware of regarding NCB in bike insurance are as follows:
- The discount cannot be divided between two different policies. It only applies to one particular policy.
- If you cancel the insurance before the end of the policy period, you run the risk of forfeiting the NCB discount accumulated for that year.
- If you decide to switch insurance providers, the NCB you accrued from your previous insurer can be transferred to the new provider.
- If insurance coverage is not renewed within 90 days of the policy’s actual expiration date, NCB will cease to exist.
- If the name changes on the RC of the vehicle, NCB benefit might be recovered.
Keep these essential points in mind to enjoy NCB discounts on your next bike insurance premium payment.
Now that you know what NCB in bike insurance is and how it helps reduce your bike insurance premiums. It is fair to say that in order to get bike insurance which provides you with comprehensive coverage while also being affordable, maintaining a No Claim Bonus is essential. So, make sure to drive safely and refrain from filling minor unnecessary claims if you want to enjoy reduced premiums on your bike insurance policy.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.
