When it comes to bike insurance, there are several ways to save money on your premium, but one of the most efficient is to take advantage of the No Claim Bonus (NCB). Many policyholders may be unaware of this benefit, but understanding how it works can lead to significant savings.

NCB stands for No Claim Bonus, a reward given by insurers to policyholders who do not make any claims during the policy term.

It is a discount on the bike insurance renewal premium, encouraging safe and responsible riding. NCB can help you save a lot on your two-wheeler insurance costs when you buy bike insurance online.

This complete guide will explore NCB in bike insurance, why it matters, and how to calculate it.

What is NCB in Bike Insurance?

No Claim Bonus, or NCB, is a discount given by insurance companies to policyholders who don’t make any claims during a policy period. The discount accumulates over consecutive claim-free years, making bike insurance renewal online more affordable.

Features of NCB in Bike Insurance

• Applicable only on Own Damage (OD) Premium: NCB applies only to the Own Damage component of your two-wheeler insurance online and not the third-party liability premium.
• Accumulated Over Time: The longer you go without making a claim, the higher the NCB discount you receive.
• Non-Transferable to Another Person: NCB is linked to the policyholder, not the vehicle. The new owner does not inherit the NCB if you sell your bike.
• Transferable to a New Insurer: If you switch insurance providers, you can transfer your accumulated NCB to the new insurer.

Why is NCB Important in Bike Insurance?

The importance of NCB in bike insurance cannot be overstated. It directly benefits policyholders in the following ways:

1. Reduces Premium Costs: NCB’s most significant advantage is the discount on bike insurance renewal premiums, which allows policyholders to save money over time.
2. Encourages Safe Riding: Since making a claim resets the accumulated NCB, riders are incentivised to adopt safer riding habits to avoid minor damages.
3. Long-Term Savings: As the discount percentage increases with each claim-free year, policyholders who maintain a good track record enjoy substantial savings in the long run.
4. Loyalty Reward: NCB acts as a reward for responsible riders who maintain their two-wheeler insurance policy without making claims.

How to Calculate NCB in Bike Insurance?

The NCB discount is applied progressively based on the number of claim-free years. The standard NCB discount structure in no claim bonus in bike insurance is as follows:

For instance, if your online bike insurance OD premium is ₹10,000 and you have not made any claims for five consecutive years, you will receive a 50% NCB discount, reducing your OD premium to ₹5,000.

How Does NCB Work in Bike Insurance?

To understand what is no claim bonus in bike insurance, consider the following scenarios:

• Claim-Free Year: If you do not file any claims during your policy tenure, your NCB accumulates, leading to a higher renewal premium discount.
• Making a Claim: If you make a claim, you may lose your NCB, depending on the insurer’s policy. Some insurers offer NCB Protection add-ons, which help retain the discount after a claim.
• Bike Sale or Transfer: If you sell your vehicle, NCB remains with the policyholder and does not transfer to the new bike owner.
• Policy Lapse: If you do not renew your two-wheeler insurance renewal within 90 days of expiry, you may lose your accumulated NCB.

How Does NCB Discount Impact Premium Calculation?

When calculating your bike insurance renewal online premium, NCB is vital in reducing costs. Here’s how it impacts premium calculation:

1. OD Premium Reduction: Since NCB applies only to the Own Damage portion of your premium, a higher NCB means a lower overall premium.
2. Long-Term Financial Benefits: Avoiding claims helps retain your NCB, leading to lower premiums over multiple years.
3. Retention Despite Policy Switch: If you switch insurance providers while maintaining a no-claims record, your NCB discount remains intact.

How Can You Transfer Your NCB Policy?

Policyholders can transfer their NCB in the following scenarios:

1. Switching Insurers: If you opt for a new insurer while renewing your bike insurance online, you can transfer your accumulated NCB by submitting a renewal notice or an NCB transfer certificate from your previous insurer.
2. Buying a New Bike: If you purchase a new bike, you can transfer your NCB to the new policy, provided you submit the necessary documentation.
3. NCB Retention Letter: Some insurers offer an NCB retention letter, valid for a specific period, allowing policyholders to retain their NCB even if they do not purchase a new policy immediately.

Add-ons Related to NCB in Bike Insurance

To maximise the benefits of NCB, insurers offer specific add-ons that policyholders can consider while purchasing two-wheeler insurance online:

1. NCB Protection Cover: This add-on ensures that your NCB remains intact even if you make one or more claims during the policy tenure.
2. Zero Depreciation Cover: Though not directly related to NCB, this add-on prevents depreciation deductions, leading to higher claim settlements and reducing the need to pay out of pocket.
3. Return to Invoice Cover: Helps recover the full invoice price of the bike in case of theft or total loss, which can be useful if you wish to preserve your NCB.

Overall, NCB is a valuable component of bike insurance that rewards responsible riders by lowering insurance premiums over time. Understanding how to check NCB in bike insurance and ensuring you maintain a claim-free record can lead to significant cost savings on two-wheeler insurance renewal.

When purchasing bike insurance renewal online, always check your NCB discount and consider opting for an NCB Protection add-on to safeguard your benefits. By maintaining a good riding record and renewing your policy on time, you can enjoy lower premiums and enhanced savings in the long run.