Role of NCB In Multi-Year Two-Wheeler Insurance Policy

Posted on: Feb 15, 2022 | | Written by:

Role of NCB In Multi-Year Two-Wheeler Insurance Policy

Published on February 14, 2022. EST READ TIME: 3 minutes

According to the Motor Vehicle Act, all bikes or two wheelers must have a valid insurance policy in the owner’s name. At least a third party policy is mandatory, as per law. With the rule, a two-wheeler insurance policy becomes a way to protect against sudden financial losses and damages.

Understanding NCB

• Bike owners need to shell out a premium annually as two-wheeler insurance. This needs renewal every year and the value of premiums is heavily dependent on the current age and insurance declared values of the two wheeler.

• When you choose a plan for your two-wheeler policy from HDFC ERGO or any other insurer, you need to consider the terms and policy details carefully. Choose a provider that offers a No Claim Bonus or NCB on the two-wheeler insurance.

• NCB for two-wheeler insurance is a discount scheme that the insurer offers to customers holding valid two-wheeler insurance. The only factor dictating NCB is that the customer does not make any claim against damages in the earlier year of the policy.

The Compulsion of Two-wheeler Insurance

• It is illegal to own a bike or two-wheeler and not have a relevant insurance policy on the same. It is a government mandated to at least, own a third party insurance policy in your name. However, a third party insurance policy is not always sufficient to cover all insurance needs. You can pick a relevant HDFC ERGO comprehensive two-wheeler policy. There is also an option of term comprehensive insurance for two wheelers.

• The main advantage of such policies is the offer on NCB that actually helps you save costs while renewing the premium. It is available on long term as well as annual policies. When you purchase a two-wheeler and two-wheeler insurance policy, you need to pay complete premium at once. The NCB is applicable form the next year but if you file a claim in the current policy year, the NCB become zero.

First Renewal, No claim	20%
Second Renewal, No claim	25 % NCB
Third Renewal, No claim	35 % NCB
Fourth Renewal, No claim	45 % NCB
Fifth Renewal and Beyond, No claim	50 % NCB

For example, if you keep the policy active for three years minus any claim filing and get eligible for NCB of 35 percent and then meet with a mishap, your NCB will become zero for the coming year’s renewal.

NCB, for a policy that is long term works on a different note. With such a policy, the NCB begins with 40 or 50 percent NCB upfront. As you make claims, the NCB is reduced.

Check out the chart for both five and three year terms-

Claims for 5 Year term	NCB in percentage
Second Renewal, No claim	25 % NCB
No Claims	50
1 Claim	45
2 Claims	35
3 Claims	20
4 Claims	20
Claims for 3 Year term	NCB in percentage
No Claims	40
1 Claims	30
2 Claims	20
3 Claims	0

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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