NCB in bike insurance is a discount provided by insurance companies to policyholders who do not make any claims during the policy period. This discount is a reward for safe driving practices and helps reduce the premium cost of the insurance policy. The NCB is transferable between insurance companies, offering flexibility to policyholders even if they switch insurers.
No Claim Bonus (NCB) in bike insurance is a discount given by insurance companies to policyholders for not making any claims during the policy period. This discount is given as a reward for safe driving and helps reduce the premium cost of the insurance policy.
The NCB can accumulate over the years up to a certain limit which will help you to save insurance premiums. If a policyholder claims during the policy period, they may lose the NCB or have it reduced.
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There are so many benefits of NCB in bike insurance that we’ve covered such as premiums, savings, transferable, incentives for safe riding, higher coverage, etc.
Premiums: The main benefit of having a No Claim Bonus (NCB) in your bike insurance policy is that you will be eligible for a discount on your premium. Insurance companies provide this discount as an incentive for policyholders who have not filed any claims throughout the policy.
Savings: By not making any claims and getting an NCB, you can save money on your bike insurance premiums over time. The discount increases with each claim-free year, so the longer you go without making a claim, the higher your discount will be.
Transferable: NCB is usually transferable between insurance companies, so even if you switch to a new insurer, you can still retain your accumulated NCB and continue to enjoy the discounts offered.
Retention of NCB: In the case of selling your old bike and buying a new one, you can transfer your NCB to the new bike insurance policy. This helps to retain the benefit of the discount even when changing your vehicle.
Incentive for Safe Riding: Having an NCB can act as an incentive for safe riding, as it encourages policyholders to drive carefully and avoid accidents to maintain their earned bonus.
Higher Coverage: The discount got through an NCB can be used to enhance the coverage of your bike insurance policy by getting add-ons or increasing the sum insured, providing you with better protection in case of an accident or loss.
NCB (No Claim Bonus) in bike insurance works as a reward for policyholders who do not make any claims during the policy period. The NCB is a discount provided on the premium of the policy for each claim-free year. The discount percentage can be around 20% to 50?pending on the number of consecutive claim-free years.
Here's how NCB works in bike insurance:
NCB Accumulation: When you do not make any claims during a policy period, you get an NCB. This NCB gets accumulated over the years for every claim-free year.
NCB Transfer: NCB is associated with the policyholder, not the vehicle. So, if you switch your insurer or buy a new bike, you can transfer your earned NCB to the new policy.
NCB Protection: Some insurers offer NCB protection as an additional benefit, where you can retain your NCB even if you make one or two claims during the policy term.
NCB Utilization: NCB can be used to avail discounts on the premium of your bike insurance policy when you renew it each year. The discount percentage increases with every claim-free year, up to a maximum of 50%.
NCB Retention: In case you sell your bike and no longer need insurance for it, you can retain your NCB for up to 3 years. This way, when you buy a new bike, you can still benefit from the NCB.
In India, the NCB Protection Add-On Cover is an optional extra layer of security you can purchase along with the cheapest bike insurance policy. It protects your No Claim Bonus (NCB) even if you end up claiming during the policy year.
Here's how it works:
Standard NCB vs. NCB Protection: If you don't file any claims during your policy period, you earn an NCB discount on your premium at renewal. But if you make a claim, you lose out on that discount.
Protection for your NCB: With NCB Protection Add-On Cover, even if you file a claim, your accumulated NCB stays protected. This means you'll still be eligible for a discount on your premium renewal, even after making a claim.
In India, the No Claim Bonus (NCB) for your bike insurance is calculated based on your claim history during the previous policy year. It's a discount applied specifically to the own damage (OD) portion of your two-wheeler insurance premium, not the third-party liability component.
Earning NCB: You qualify for NCB if you don't file any claims during your previous policy year.
NCB Discount Percentages: The discount you receive increases with each claim-free year which starts at 20% for the first year and goes up by 5% or 10% for every subsequent claim-free year. The maximum limit can vary depending on the insurance company, but it generally reaches 45% or 50%.
NCB Calculation Example: Let's say your bike insurance has an annual premium of Rs. 10,000, with an OD portion of Rs. 6,000. If you haven't made any claims in the first year, you'll earn a 20% NCB on renewal & you’ll get a discount of Rs. 1,200 (20% of Rs. 6,000) on the OD premium. So, you'd pay a renewed premium of Rs. 8,800 (Rs. 10,000 - Rs. 1,200 discount).
The impact of NCB discount on premium calculation is significant. As the number of claim-free years increases, the NCB discount also increases which can reduce the premium amount.
Here's a table showing the impact of NCB discount on premium calculation:
|
Claim-free years |
NCB Discount (?) |
Discounted Premium (?) |
|
0 |
0 |
10000 |
|
1 |
1200 |
8800 |
|
2 |
1800 |
8200 |
|
3 |
2400 |
7600 |
|
4 |
2700 |
7300 |
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NCB (No Claim Bonus) is important for two-wheeler insurance for many reasons such as cost savings, incentive for safe driving, retention of coverage, higher coverage, etc.
Cost Savings: NCB offers policyholders a discount on their premium for every claim-free year. This will help them to save costs over time.
Incentive for Safe Driving: NCB is an incentive for safe driving practices as policyholders are motivated to avoid filing claims to preserve their bonus.
Retention of Coverage: NCB encourages policyholders to renew their insurance policy with the same insurer to retain their accumulated bonus.
Transferability: NCB can be transferred from one insurer to another when policyholders switch providers. This ensures that policyholders are rewarded for their claim-free history regardless of the insurer.
Higher coverage: With NCB, policyholders can get higher coverage without increasing their premium, providing them with better protection.
Transferring your No Claim Bonus (NCB) to a new bike insurance policy is a simple process which we have mentioned below.
Get an NCB Certificate: Contact your current insurance provider and request an NCB certificate. This certificate will contain details of your NCB entitlement that can be transferred to your new policy.
Purchase a New Bike Insurance Policy: Compare bike insurance online from different insurance providers and select a policy that suits your requirements. When purchasing the new policy, inform the insurance provider about your NCB entitlement.
Submit NCB Certificate: Provide the NCB certificate obtained from your previous insurance provider to the new insurance provider. This will help in transferring your NCB to the new policy.
NCB Transfer Process: The new insurance provider will verify the NCB certificate and process the transfer of the NCB to your new policy. The discount offered will depend on the number of claim-free years you have accumulated.
Pay Premium: Once the NCB transfer process is completed, you will be required to pay the premium for the new bike insurance policy after deducting the NCB discount.
Receive Confirmation: After completing the payment, you will receive a confirmation from the insurance provider mentioning that your NCB has been successfully transferred to the new policy.
Some important documents are required to transfer the NCB which we have mentioned below.
Vehicle registration certificate (RC)
Insurance policy documents
No-claim bonus (NCB) certificate from the current insurance company
A copy of the previous year's insurance policy
Copy of the driver's license
Application form for transferring NCB
Proof of sale agreement, if the vehicle has been sold
Original invoice of the vehicle, if transferring NCB to a new vehicle
Any other documents as requested by the insurance company
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You don't claim your NCB (No Claim Bonus) directly in India. The NCB discount is automatically applied when you renew your two-wheeler insurance policy, assuming you meet the eligibility criteria.
Earning NCB: You qualify for NCB by having a claim-free year during your previous policy period. This means you didn't file any claims for repairs or damages to your bike.
NCB Discount on Renewal: When it's time to renew your insurance, the insurer will consider your NCB entitlement. If eligible, they'll apply a discount to your premium based on your claim-free history. The discount starts at 20% for the first claim-free year and increases with each subsequent year, reaching a maximum limit (usually 45-50%).
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In conclusion, NCB in bike insurance is a benefit provided by insurance companies to policyholders who maintain a claim-free record. This discount is a reward for safe driving practices. The transferability of NCB between insurance companies offers flexibility to policyholders, even if they switch insurers. NCB not only incentivizes safe driving but also allows policyholders to retain their accumulated bonus and enjoy higher coverage without increasing their premiums.
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