Knowledge Centre

NCB in Two Wheeler Insurance - Know About No Claim Bonus for Two Wheeler Insurance

Published on June 6, 2020, EST READ TIME: 5 MIN

Even though you are an experienced rider and you follow the rules, uncertain events like accidents or any natural calamity like cyclone, floods etc. can cause heavy damage to your vehicle or subject you to third party claims. A Comprehensive two wheeler insurance offers financial protection against such damages from natural events like floods, earthquake, cyclone etc. and man-made events like riots, arson, and civil unrest, also it offers protection against financial liability claim arising from third party claims in case of accident. It offers much more insurance coverage than the third party insurance coverage which offers protection against the claims raised by third party in event of accident.

 

A No Claim Bonus is a discount that is given to the biker by the insurance companies in case the biker raises no claim during the policy year, this is used as a reward for the bikers who follow a good driving regimen, put in high focus on the proper maintenance of the bikes and act as deterrent for rogue driving behavior.

 

The good news is that if you have not made any claims over the years, the no claim bonus can be carried forward.

 

How Does No Claim Bonus Work?

No Claim Bonus allows you to get discount on the two wheeler insurance premium renewal.  In the first year you get a discount of 20% and with each passing year, the no claim bonus accrues and by the end of the fifth year, you can become eligible to a discount of around 50%.  

 

Claim Free Years

No Claim Bonus

After 1 year

20%

After 2 years

25%

After 3 years

35%

After 4 years

45%

After 5 years

50%

 

After completion of 5 years, the no claim bonus is not going to increase even if you do not make a claim during the policy years.

 

Know more about Two Wheeler Third Party Insurance

How Could I lose No Claim Bonus?

Yes, there are cases where you can lose your No Claim Bonus, it can be reset to zero in the event you make a claim, and this is the case irrespective of the year in which the claim has been made.  It can be disappointing that you could lose your hard earned no claim bonus, but there is a way you can protect your NCB against such happening with the help of No Claim Bonus protector add-on. This add-on protects the no claim bonus. Some of the insurers put a condition on the number of years you should not make a claim before you can avail the benefits of the No Claim Bonus Protector.

 

Therefore you should always follow good driving behavior and avoid risks like bike racing or other adventurous ventures which can lead to any kind of accidents which can result in you losing your NCB.

Points of Importance of No Claim Bonus

  • No Claim Bonus is a reward from the insurer to the two wheeler insurance policyholder for their good driving behavior and not making a claim, however NCB can be claimed only when the insurance policy is renewed on time or within atleast 90 days of expiry of previous policy. Therefore you need to make it a point that you renew your two wheeler insurance policy on time as the policy goes into lapsed state and then your two wheeler stands to lose all the insurance coverage it had.
  • It is available on the own damage component of premium and not the third party cover.
  • NCB is connected to you, therefore even if you sell your bike after three years to buy a new one, you would be able to take the NCB accrued over 3 years for the first premium of your newly bought two wheeler, however if you purchase a car the no claim bonus of your previous two wheeler would not get transferred.
  • No Claim Bonus cannot be transferred from one page to another, it cannot be transferred to legal heir or to a nominee in event of death of the policyholder.
  • In order to ensure that no claim bonus is intact, you need to make sure that you do not make a claim for the small or minor damages that require small repairs as in the event of making just a small claim your NCB can become zero. Imagine that you have accumulated 50% NCB and losing all of it because you made a small claim.

 

Know the Benefits of Comprehensive Two-Wheeler Insurance in details

Procedure of Transferring NCB

The procedure to transfer No Claim Bonus is a simple one. To effect a transfer when you are buying a new car and selling your old bike, you would have to submit form 29 and 30 (buyer-seller agreement form) along with the letter requesting transfer of NCB to your existing insurer. The insurer would then issue a NCB certificate which is valid for three years. If you  go for a new insurer, you would have to submit it.  In event of you purchasing the policy online, you would not have to submit the pages; your NCB will get transferred based on your declaration.  You need to be honest with such declaration as the insurer could cross check the claims data with the previous insurance company.

No Claim Bonus Calculation

The No Claim Bonus is applicable on the rate of discount presented above. Suppose you had bought a bike in 2013 and sold it after 2018, which is after the completion of 5 years. Considering you had not made a claim during last 5 policy years, you are eligible for 50% NCB rate. You purchase a new bike in late 2018, here the premium you pay for it is Rs 10,000 out of which Rs 7,000 is for own damage component and for third party is Rs 3,000. You can transfer the NCB earned on previous bike to the new bike, so on applying the discount, the own damage premium is Rs 3,500 and the third party premium is Rs 3,000. The total applicable premium is now Rs 6,500 instead of Rs 10,000, thereby earning you a saving of Rs 3,500.

Conclusion

Having a motor insurance is mandatory under law, as per the Motor Vehicle Act 1988, every motorist needs to have a valid motor insurance policy at all times but apart from the legal aspect one should note the advantages of having bike insurance for bikers as it offers insurance coverage for their bikes in case of uncertain events.

 

We also need to be a responsible driver and get the bike insurance policy renewed before time as one may stand to lose benefits like the no claim bonus which can help the biker in insurance premium reduction.

This blog has been written by

Mukesh Kumar | Motor Insurance Expert | 36+ years of experience in insurance industry

A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.

Mr. Mukesh Kumar recommends "getting your two wheeler insured from HDFC ERGO, a brand serving more than 1 crore+ customers. With overnight repair services and more than 6,800+ network garages, you can be assured of help in event of any damage to your vehicle


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