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What is no claim bonus in bike insurance

Two wheeler insurance provides financial protection to the owner of a two wheeler in the event of any unforseen incidents such as theft or accident. It also protects the rider in the event of loss to a third party. Click to see more details https://www.coverfox.com/two-wheeler-insurance/

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What is no claim bonus in bike insurance

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  1. What is no claim bonus in bike insurance?

  2. No Claim Bonus (NCB) Definition. No claim bonus (NCB) is a discount, given by an insurer to a policyholder for making no claims during the policy term. NCB can be accumulated over years and the discount ranges from 20% to 50% on the own damage premium.

  3. Illustration • On first renewal, a car with IDV (Insured Declared Value) of Rs. 4 lakhs has own damage premium of Rs. 12,000. The policyholder is entitled to 20% discount if he has not made a claim. So, his premium would be Rs. 9,600. He clearly saves Rs. 2,400 by not making a claim. • The money saved on OD (Own Damage) premium keeps increasing every year with the discount increasing annually.

  4. Can no claims bonus be protected? • NCB is like a gift by the insurance provider for not making any claims in the previous 1 year (or 3 years, depending on your policy tenure). NCB can be claimed only if you renew the insurance policy regularly, at least within 90 days of expiry of the previous policy. • It is available only on the own damage component of the premium, and not on the third-party cover. • The proportion of NCB rises each year, from 20% after the first year without any claim, to 25% at the end of the second claim-free year, 35% after the third year, 45% after the fourth year and 50% at the end of 5 claim-free years. • NCB is accrued to your account and not to the account of your vehicle. This means that if you do not make any claim for 3 years and you sell your bike to buy a new one, you can avail NCB benefits accrued by you in the previous 3 years on the first premium for the new vehicle as well. However, you cannot transfer the NCB from a two wheeler insurance to a four-wheeler insurance policy

  5. For example, you buy a scooter in 2009 and pay premiums regularly, renew the policy on time and make no insurance claims for 5 years. You sell the vehicle in 2014 and buy a new one, for which the premium is Rs.2,500. The own damage component in the premium is Rs.2,000. With 5 years of NCB, you are eligible for a 50% discount in your new vehicle’s premium, which means that you only have to pay Rs.1,500 instead of Rs.2,500 as premium for the new scooter. • You can also transfer the NCB from one vehicle to another even if you are changing the insurance provider. For this the first insurer should give you an NCB certificate. This can also be claimed when you buy an insurance online. • NCB cannot be transferred from one person to another. The only exemption to this is if the policy is transferred to the legal heir or nominee of a person on the policyholder’s death. • To ensure that you are able to maintain an NCB on your policy, try not to make insurance claims on minor damages to the vehicle that do not require a lot of expense. If you make even 1 claim, then the NCB will revert to zero and you will get no discounts in premium for the next year.

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