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What is NCB in Two wheeler insurance?

By Finserv MARKETS - Jul 25,2019
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NCB in Bike Insurance

Most insurance providers offer an NCB facility at the time of renewing your two-wheeler insurance with them. With this article, you can get a piece of detailed information about what exactly is this NCB facility, how it works, and why it is advantageous.

What is NCB?

A No-Claim Bonus (NCB) is a discount offered on the premium at the time of renewal of your insurance policy. An NCB is most common in the case of a car or two-wheeler insurance.

NCB in Bike Insurance

According to Section 177 of Motor Vehicle Act, all vehicle owners must insure their vehicle and are liable to pay hefty fines if they flout any roadside regulations. Thus, if you own a two wheeler like a scooter or a bike, it is mandatory that you buy insurance for it.

In India, you will find a number of insurance providers that offer online bike insurance with several attractive features and benefits. One such benefit is the No Claim Bonus. An NCB on your bike insurance is a reward offered by your insurance provider for making no claims during the term of your policy year.

During bike insurance renewal, the higher the NCB will be, the lower your insurance premiums will be. Hence, it is highly advisable not to claim for minor damages and bike repair work. Paying for these small expenses from your pocket will come in handy in the long run.

How does no claim bonus work?

Typically, a policyholder can enjoy 5% discount on the first claim-free year. This discount keeps on increasing on each renewal, along with the increase in premium rates. Thus, if no claim has been made, a policyholder has an opportunity to claim up to 20%-50% on the own damage premium of his bike insurance.

Let us understand this with an example

Suppose you buy bike insurance with a premium of Rs. 20,000. In case you do not make any claim, you become entitled for 5% NCB on your first year. Thus, you can enjoy a discount of Rs.1000, with your premium amount coming down to Rs. 19,000. Similarly, if you do not make any claims on the subsequent years of your bike insurance renewal, you become eligible for percentage discounts as follows

Number of Claim-Free Renewal Number of Claim-Free Renewal
1st Claim-Free Renewal 5%
2nd Claim-Free Renewal 10%
3rd Claim-Free Renewal 15%
4th Claim-Free Renewal 20%
5th Claim-Free Renewal 25%

Termination of NCB

Your NCB benefit will be terminated in the following two scenarios-

  • If a claim is made in the current policy year
  • If your two-wheeler insurance policy is not renewed within three months from the date of expiry

Benefits of NCB

  • An NCB is a great way to reduce your premium costs
  • NCB is transferable to your new vehicle. A policyholder can claim NCB even if he/she sells the old vehicle and buys a new one.
  • NCB can also be transferred to the new owner if the original owner decides to sell his/her vehicle.
  • In an annual policy, making a single claim can freeze your NCB. However, when it comes to long-term bike insurance, only a certain percentage of NCB is deducted. The NCB never becomes zero, unless you cross the limit of the number of claims on your policy.
  • The No Claim Bonus can be transferred in case you want to switch from one insurance provider to another. Know for a fact that NCB is a reward given to you and not your motorcycle.
  • The NCB does not apply to commercial vehicles except for vehicles that are serving as taxis and cabs.
  • You can protect your NCB discount from getting lapsed by buying an add-on cover – ‘no claim bonus protection’ cover – by paying extra premiums.

Limitations to NCB

  • No-Claim Bonus is only offered for ‘Own Damage Cover.’
  • No-Claim Bonus does not apply to Third-Party Insurance
  • No-Claim Bonus is not applicable for ‘Add-on covers’.
  • Even a small claim can wipe out the full reward of an NCB, forcing you to start afresh
  • There is a defined slab for maximum NCB on two-wheeler insurance. This slab may differ from one insurance provider to another. Typically, a 50% NCB is the maximum slab accepted by most insurance providers

Now that you understand what NCB in bike insurance is, you may also want to know what a zero depreciation bike insurance policy is.

At Finserv MARKETS, two wheeler insurance renewal online is absolutely hassle-free. Browse through a variety of two-wheeler and four-wheeler insurance options and enjoy benefits such as no-claim bonus, cash-free servicing, and instant claim settlement.

Visit our Insurance section today to get Bajaj Allianz Two Wheeler Insurance online at an affordable premium! Also you can know more about bike insurance renewal if you already own a policy.

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we works towards fulfilling all your personal and financial needs . What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522