Policyholders often seek ways to reduce their bike insurance premiums without sacrificing coverage. One effective solution is opting for No Claim Bonus (NCB).
No-claim bonus (NCB) is a significant feature of two-wheeler insurance that pays riders who do not file any claims throughout the policy year. It can drastically cut insurance costs over time, hence making it a popular option among riders.
In this post, we’ll explain how NCB can help you save on your bike insurance premium and its other benefits.
What is No Claim Bonus (NCB)?
No Claim Bonus (NCB) is a discount your motor insurance grants if you do not file any claim throughout the policy’s term. Simply put, it is a discount on the premium granted by the insurance company for riding your bike responsibly. To save money on premiums, all you have to do is choose a two wheeler insurance plan that has a suitable NCB.
Now that the concept of NCB is clear let’s look at how it functions.
How Does No Claim Bonus (NCB) Work?
The No Claim Bonus ranges from 20% to 50%, with a rise for each consecutive claim-free year. As a result, it is a cumulative incentive that will allow you to save significantly on premiums. You can take advantage of these reductions while renewing your coverage.
Furthermore, NCB in two-wheeler insurance applies only to own-damage premiums, not third-party premiums. To benefit from NCB, you must have a comprehensive bike insurance plan or standalone damage coverage.
The data below shows an example of NCB accumulation for each claim-free year.
| Number of Claim-Free Years | NCB Percentage |
| 1 claim-free year | 20% |
| 2 consecutive claim-free years | 25% |
| 3 consecutive claim-free years | 35% |
| 4 consecutive claim-free years | 45% |
| 5+ consecutive claim-free years | 50% (Maximum) |
How Does NCB Help You Save on Your Bike Insurance Premium?
NCB in bike insurance provides a wide variety of benefits to its policyholders. Some of these are as follows:
- Direct Impact on Premium
As outlined before, the NCB can range from 20 to 50% based on the number of claim-free years, reducing your premium costs and allowing you to make extra savings.
- Compound Savings
Every year you go without making a claim, you accumulate a higher NCB discount. Let’s illustrate this with an example.
Suppose your premium for your insurance is ₹5,000 per month.
- Claim free Year 1: Your premium is ₹5,000. After a 20% NCB, you pay ₹4,000.
- Claim free Year 2: Your premium is ₹5,000. After a 25% NCB, you pay ₹3,750.
- Claim free Year 3: Your premium is ₹5,000. After a 35% NCB, you pay ₹3,250.
- Claim free Year 4: Your premium is ₹5,000. After a 45% NCB, you pay ₹2,750.
- Claim free Year 5: Your premium is ₹5,000. After a 50% NCB, you pay ₹2,500.
However, it is important to note that the premium goes up due to inflation. Even then, your NCB amount will help you save if you pay the full premium price with inflation.
- Financial Planning Advantage
The No-Claim Bonus (NCB) can play an important part in financial planning by providing immediate income rewards and helping to fund larger savings plans.
For example, if you save ₹1,500 each year due to NCB. If you invest this money at an average return of 7% annually, your ₹1,500 could grow significantly over time, adding to your overall financial security.
Balancing NCB and Zero Dep Add-on
The zero depreciation add-on coverage in bike insurance assures the insured receives the full claim amount.
It is available with a comprehensive or own damage insurance policy.
If the policyholder has this add-on cover, the insurer will not deduct the depreciation amount on the assessed two-wheeler parts as per the policy document. Simply put, their bike’s value will remain as good as new.
The No Claim Bonus (NCB) reduces your premium and helps you save. Meanwhile, zero-dep covers exist for when you’re in an accident or there’s a need to make a claim, and you get the full claim amount.
Depending on how much you’re saving with NCB and the expenses required for components that are under zero dep, you can decide whether to make a claim or let the NCB discount pile up.
What are the Factors that affect NCB in Bike Insurance?
It’s important to know the factors that affect your NCB so you don’t lose out on its benefits.
Making a Claim
Making a claim can reduce or reset your NCB. If you make a claim, the insurer can take away your No Claim Bonus or even revoke it altogether, which means the discount you get on your premiums goes away. The NCB will be affected more by multiple claims within the policy period.
Policy Renewal
At renewal time, your claim-free record is essential. The insurer will apply the NCB at the time of renewal, reducing your premium if you have maintained a claim-free policy year.
Switching Insurers
Switching insurers may affect the transfer of NCB. Some insurers allow you to transfer your NCB when switching, while others might not. It’s essential to confirm with the new insurer about the possibility of transferring your accumulated NCB to ensure continued premium reductions.
Tips to Maximise Your NCB in Bike Insurance
Here are a few tips you can use to maximise your NCB savings.
Ride Safely
A safe riding habit helps you stay claim-free and boost your NCB. It reduces the chances of accidents.
Maintain Your Bike Regularly
Regular bike maintenance keeps it running optimally and reduces the chances of breakdowns or accidents.
Don’t Claim for Minor Issues
If you can pay out of pocket, you can avoid a claim and keep your NCB.
Renew Your Policy Promptly
NCB benefits are not lost due to a break in coverage if your policy is renewed timely.
Know NCB Transfer Rules
If you are switching insurers, find out if your new insurer will accept NCB. If not, you will lose your premium discount.
No-claim bonus (NCB) is an important element of two-wheeler insurance that provides considerable financial benefits while encouraging safe riding. NCB not only makes insurance more reasonable by lowering premiums based on a claim-free record, but it also promotes prudent driving.
Understanding how NCB works and how it affects premium estimates can help you make better decisions regarding your insurance coverage.
Leveraging this benefit along with the zero depreciation add-on cover can result in significant long-term savings and increase the total value of your policy.
