Benefits of NCB in Multi-Year Two Wheeler Insurance

With owning a bike comes the inevitable insurance policy. And when there’s an insurance policy, there’s a renewal date looming somewhere in the distant horizon. And for some of us, try as we might, that renewal date slips by in a flurry of juggling work, study, meetings, family, friends and myriad other more important events each day. Instead of bemoaning yet another delated insurance renewal, there’s a new kid on the insurance block- multi-year two wheeler insurance, which gives us 2 or 3 whole years before renewal day rolls along.

So what’s the big deal about multi-year two wheeler insurance? And are there any discernible that takes away a sizeable chunk of your hard-earned money toward a 3-year premium at one go?

Besides the obvious lack of having to worry about premium payments for the next 3 years, multi-year two wheeler insurance offers other benefits as well, one of them being freedom from annual hikes in your premium.

No Claim Bonus Advantage

Another advantage is with regard to the No Claim Bonus. In insurance parlance, a no claim bonus is one where insurers offer policyholders a discount if they have not made a claim during the policy term.

No claim bonuses are a feature of both annual as well as multi-year insurance, so what advantage does a multi-year policy offer?

The No Claim Bonus in a multi-year insurance policy is higher than one offered for an annual policy.

To better understand the difference, refer to the tables below.

No Claim Bonus for Single Year Policies:

Year Bonus (%)
1st claim-free year 20%
2nd claim free year 25%
3rd claim free year 35%
4th claim-free year 45%
5th claim-free year 50%

For single year policies, even a single claim would result in the bonus falling to 0%.

No Claim Bonus for Multi-Year Policies:

In the case of multi-year policies, however, the Non Claim Bonus can be availed in spite of filing a claim.

Insurers allow policyholders to file a claim during the policy term subject to certain terms, as listed below:

  • In case no claims are filed during the policy term, policyholders receive 30-35% discount.
  • If one claim is made in the first policy year but no claims are made in the next two years, policyholders are entitled to 25% discount.
  • If one claim is made in the second policy year but no other claims are made thereafter, policyholders are entitled to 20% discount.
  • If a claim is made in the third policy year or more than one claim is made during the policy tenure, policyholders are not entitled to any discount.

Other insurance companies provide what is known as an incremental No Claim Bonus discount, which is illustrated through the below table:

Total Claims No Claim Bonus (in %)
0 40
1 30
2 20
3 0

From the above table, we see that filing no claims during the policy period results in a 40% discount, filing 1 claim results in a 30% discount and so forth.

Insurers have different policies regarding No Claim Bonus discounts which could vary. However, irrespective of the different policies, it is clear that for a multi-year insurance policy, the percentage of discount provided for No Claim Bonus is higher than for single year policies.

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