No Claim Bonus Two Wheeler Insurance:
No Claims Bonus (NCB) is a discount you can avail on the premium payment for motor insurance if you make no claim during the period of the insurance policy. This is applicable for both car insurance and two-wheeler insurance, but only in comprehensive policies and not on simple third-party policies.
The points of importance in the context of an NCB are:
- NCB is like a gift by the insurance provider for not making any claims in the previous 1 year (or 3 years, depending on your policy tenure). NCB can be claimed only if you renew the insurance policy regularly, at least within 90 days of expiry of the previous policy.
- It is available only on the own damage component of the premium, and not on the third-party cover.
- The proportion of NCB rises each year, from 20% after the first year without any claim, to 25% at the end of the second claim-free year, 35% after the third year, 45% after the fourth year and 50% at the end of 5 claim-free years.
- NCB is accrued to your account and not to the account of your vehicle. This means that if you do not make any claim for 3 years and you sell your bike to buy a new one, you can avail NCB benefits accrued by you in the previous 3 years on the first premium for the new vehicle as well. However, you cannot transfer the NCB from a two-wheeler insurance policy to a four-wheeler insurance policy.
- For example, you buy a scooter in 2009 and pay premiums regularly, renew the policy on time and make no insurance claims for 5 years. You sell the vehicle in 2014 and buy a new one, for which the premium is Rs.2,500. The own damage component in the premium is Rs.2,000. With 5 years of NCB, you are eligible for a 50% discount in your new vehicle’s premium, which means that you only have to pay Rs.1,500 instead of Rs.2,500 as premium for the new scooter.
- You can also transfer the NCB from one vehicle to another even if you are changing the insurance provider. For this the first insurer should give you an NCB certificate. This can also be claimed when you buy an insurance online.
- NCB cannot be transferred from one person to another. The only exemption to this is if the policy is transferred to the legal heir or nominee of a person on the policyholder’s death.
- To ensure that you are able to maintain an NCB on your policy, try not to make insurance claims on minor damages to the vehicle that do not require a lot of expense. If you make even 1 claim, then the NCB will revert to zero and you will get no discounts in premium for the next year.
- You can opt for an NCB protect add-on cover that will ensure that your NCB stays intact even if you make a claim. However, this may have limitations differing from insurer to insurer: the add-on cover may work only if you have made no claims in the previous 2 years; it may allow only 1 own damage claim in a year; or it may not be applicable if you file for a total loss claim.