No Claim Bonus (NCB) in Bike Insurance
Do you remember your good old days when you were a kid ? your Dad would tell you if you behaved well the whole day, studied hard and did not make noise, you would get a treat candy? A No Claim Bonus (NCB) is like the same offer for being a good disciplined biker.
You may think that what has a bonus got to do with good bike riding, right? If you have bought a bike insurance but you have driven safely and maintained the bike properly, then you will not need to raise an insurance claim, because there is no damage to make a claim for!
What is NCB in Bike Insurance?
Insurance companies mention that if you drive safely, and do not raise a claim for a year, on your policy renewal, you will receive a discount on the premium. This discount is called a No Claim Bonus.
an NCB is defined as a discount on premium awarded to the policyholder for not making a claim during the policy year. To discourage rogue claims and embibe some type of discipline, the concept of No Claim Bonus was introduced (though we love claims and helping out people!).
The good news is, if you continue with the good behavior and your bike never faces any accidents, damages or issues as such, then you can accumulate your No Claim Bonuses over the years. We will see little later, how well this works for your pocket.
Can you transfer the NCB when you buy a new Bike?
Yet another good news is, the accumulated NCB bonus is like the famous pug, it goes with you wherever you go. That is, it is transferable from your old vehicle to new vehicle, if you decide to buy a new bike, as long as you remain the policy holder. Your NCB is for YOU as the policy holder and not for your bike.
How NCB is Calculated in Bike Insurance
Your no claim bonus kicks in ONLY after the first renewal of your comprehensive two wheeler insurance policy. (Please note NCB applies to Own Damage component of your premium, which is the premium calculated based on IDV or insured declared value of the bike minus the cost of bike’s wear and tear. The bonus does not apply to third party cover premium).
You begin with receiving a 20% discount on your premium after the first claim-free year. The discount increases by 5-10% at the time of policy renewal each year. In other words, each year that you do not raise a claim in, the discount is accrued, almost as if the reward for policy holder’s good behavior keeps getting meatier.
For example, if you got 20% NCB at the end of first policy year and you do not make a claim in the second year either, the discount on your premium will go up to 30% , then 30-35% in the consecutive year and so on. This way, you can get up to 50% discount on your premium in 5 years.