NCB In Bike Insurance
The No Claim Bonus (NCB) in bike insurance is a discount on the Own Damage (OD) cover premium. The insurance provider offers the NCB benefit when you do not make any claims against your bike insurance during the year. NCB allows you to reduce your bike insurance premium and can lessen your financial burden.
The No Claim Bonus in bike insurance is set at 20% for the first claim-free year. On top of that, for every consecutive year of not making any claims, you can accumulate NCB, which maxes out at 50%. So, if you continue with your claim-free years, you can avail of up to 50% discount on your OD cover premium after the end of the 5th year. The No Claim Bonus in bike insurance essentially rewards the provider's offer for driving safely, cautiously, and responsibly by providing a discount on bike insurance premiums.
The No Claim Bonus (NCB) in bike insurance is essentially a reward insurance providers offer for driving safely, cautiously, and responsibly. By providing a discount on bike insurance premiums, insurance providers encourage policyholders to drive safely through the NCB in bike insurance.
How does NCB Work?
The NCB is a discount on the Own Damage (OD) cover premium. For the first claim-free year, the NCB in bike insurance that you get is 20% of the premium. As a result, for every consecutive year of not making any claims, you accumulate NCB, which tops out at a maximum of 50% of your premium Comprehensive two-wheeler insurance. So, if you continue with your claim-free years, you can avail of up to 50% discount on your OD cover premium after the end of the fifth year. You must file insurance every year after the maximum has been reached to be eligible to accumulate any additional discount. You have to pay half of the applicable premium.
You can still accumulate your NCB even if your vehicle meets with an accident. Let’s say the third-party insurance of the other party that caused damage to your vehicle covers your damages. In this scenario, if it is determined that the insurer will not have to pay you out despite you filing a claim, then the NCB will continue.
Simply put, the NCB will lapse only and only if the insurer honours your claim and pays you out. With the claim being honoured, the NCB will accumulate.
How is the No Claim Bonus Calculated in Two-Wheeler Insurance?
Now that you have a fair idea of what NCB in two-wheeler insurance is, it is time to check out how this benefit is calculated. Let’s take the help of an example.
There are two individuals - Adarsh and Ranvir. Both purchase the same two-wheeler - Royal Enfield Classic 350 at around the same time. They’ve also opted for the same comprehensive bike insurance policy from the same insurance provider for the first-year premium of Rs. 15,000.
While Adarsh completed the first year successfully without making any claims, Ranvir got into an accident and had to make a claim. At the end of the first year, Adarsh became eligible for a 20% NCB in bike insurance, while Ranvir didn’t get the advantage of NCB.
Here’s a table clearly explaining the effect of the No Claim Bonus.
Year |
Premium |
Adarsh |
Ranvir |
1 |
Rs. 15,000 |
Rs. 15,000 |
Rs. 15,000 |
2 |
Rs. 12,000 |
Rs. 9,600 (Rs. 12,000 - 20% of Rs. 12,000) |
Rs. 12,000 |
As you can see from the above calculation, Adarsh saved around Rs. 2,400 by driving safely and not claiming in the first year. On the other hand, Ranvir didn’t get the benefit of NCB and had to pay the full premium.
Benefits of NCB in Bike Insurance
The benefits you get to enjoy by accumulating an NCB in bike insurance are numerous. Here’s a quick look at a few of them.
Limitations of NCB in Bike Insurance
Just like the benefits, the NCB in bike insurance also has a few limitations you should consider. Let’s look at some of these limitations:
NCB Policy Addons
To be eligible for an NCB discount, consumers must not file any claims during the last insurance term. This no-claim bonus can be reduced to zero if you have filed a single claim. To maintain your accrued NCB rebate, buy an add-on cover to protect your NCB.
This add-on cover allows you to file a maximum of two/three claims during the insurance without having to forfeit your accrued NCB. It also helps you take full advantage of the insurance policy without paying high premiums the following year.
The best part is that the NCB Protect add-on does not affect your collected NCB balance. The NCB discount remains the same and will not change whether you use additional add-on coverage.
Why is NCB important for two-wheeler insurance?
NCB in two-wheeler insurance is important as it helps you to save money on your policy payment. Under NCB, you can earn a discount on your policy premium upon policy renewal after each claim-free policy term. After five consecutive claim-free policy terms, this can reduce the policy premium by up to 50%. As a result, you can save money by drastically reducing your spending on bike insurance.
How Does No Claim Bonus Impact Your Premium Calculation?
The NCB in bike insurance is only offered after the completion of the first year of not making any claims. And for every claim-free year since, the NCB percentage in bike insurance continues to go up until it reaches 50%, which is the maximum bonus insurance providers offer. IRDAI determines the rate of NCB discount that is offered annually on your 2-wheeler insurance plan.
The table below can help you understand the No Claim Bonus's impact on your premiums.
Claim-Free Years |
No Claim Bonus Reward |
After 1 year |
20% of the premium |
After 2 years |
25% of the premium |
After 3 years |
35% of the premium |
After 4 years |
45% of the premium |
After 5 years |
50% of the premium |
When is NCB terminated/ cancelled/ not available?
Your No Claim Bonus can get cancelled in the following situations:
If a claim has been made during the term of the policy
If the policy has not been renewed within 90 days of its expiry date
You are eligible for an NCB only when you have a comprehensive insurance policy. You would not get any NCB in third-party liability-only insurance.
How To Transfer An NCB Policy?
You need to keep in mind that the No Claim Bonus belongs to the policyholder and not the vehicle. So when you sell or buy a new/prior owned vehicle, there is no transfer of NCB from vehicle to vehicle.
However, you have the option to transfer the NCB when you are switching insurers. If you wish to buy a new/prior owned vehicle and you have some accumulated NCB, you can get it transferred. When renewing the policy, you must inform the insurance company. You must cancel your insurance policy if you sell your car/bike. Submit the documents given below, after which your current insurance company will approve the NCB retention:
Copy of Insurance policy
Form 51- Certificate of Insurance
Policy cancellation request
Form 29- Transfer of ownership
Copy of Registration Certificate with the new owner’s name (RC)
Proof of the vehicle’s delivery to the new owner
How to Claim NCB policy
There are two scenarios to claim your NCB policy,
Renewal of policy from same insurance provider: If you renew your two-wheeler policy from the same insurance provider, mention on your renewal form that you already have an accumulated No Claim Bonus. The NCB will be deducted from the premium owed for the following insurance period.
If you change your insurance provider: You must submit proof or a certificate acquired from your previous insurance provider to retain NCB with your proposed insurance plan if you're changing insurers. If you've bought a new bike and want to use NCB for the same, you need the NCB retention proof here. Please note that you can only request the NCB retention certificate once you have filed a cancellation request.
Things to remember about NCB in India
Keep the following things in mind when it comes to NCB in insurance in India:
Only when you opt for comprehensive insurance would you be eligible for NCB in bike insurance and not with third-party liability covers.
If a claim is made during the policy year, the NCB in bike insurance will be nullified.
Ensure you renew your policy on time, as all accumulated NCB will be terminated if the policy is not renewed within 90 days of the expiry date.
The NCB in 2-wheeler insurance acquired cannot be transferred to another policyholder; however, the NCB is transferable when switching insurers or vehicles.
Terminating an insurance policy in the middle of the term may also cancel the NCB that has been acquired.
Wrapping It Up
We hope you have now understood the meaning of NCB in bike insurance and its significant impact on your bike insurance premiums.
One of the many ways you can retain your NCB in two-wheeler insurance is by refraining from making small claims. Instead, you can pay for the expenses out of your pocket. This way, you can ensure that the NCB in bike insurance policy remains intact.
Or alternatively, you can choose to opt for the optional NCB Protect add-on for your bike insurance plan as well, which can allow you to retain your No Claim Bonus despite claiming during a year.
If you wish to check out bike insurance plans that offer the optional NCB Protect add-on, head to the Bajaj Markets website. You can browse through the list of plans that offer the add-on, compare them, and choose the one that satisfies your needs.