No Claims Bonus (NCB) is a discount benefit provided, if no claim has been made during the period of insurance policy.It is an incentive offer for the customers who do not raise any claim in their policy period. For every year if a claim is not made a NCB is given between 20% - 50% for successive 5 years.
Suppose there are two bike owners Mr. X and Mr. Y both of them have taken similar comprehensive covers for their vehicle. Mr. X does not make any claim but Mr. Y does.In this case Mr. X becomes eligible for 20% benefit whereas Mr. Y NCB has turned zero. Mr. Y will pay the whole premium amount and no discount will be given to him.
NCB discounts are applied only for self damage cover.Third party liability is not included in No claim Bonus. The reason behind NCB was to make people aware about traffic rules and teach discipline to the riders. And if no claim is filled during the policy year then as a premium discount NCB is given.
During the policy period if you do not make any claim, you get to collect NCB on your bike Insurance and receive benefits in following ways
If no raise is claimed during the policy period, No Claim Bonus offers a discount in paying renewal premium. So, financial benefit is given while policy renewal.It motivates the customers to drive safely and stick to the traffic rules.
No Claim Bonus protection add - in cover is an optional cover to safeguard NCB which might get affected from raising a claim. Generally, NCB is given when no claim year is successfully passed, where the vehicle is damage free the whole year. Thus, If any single claim is even raised you might lose the chance of getting NCB benefits. For that reason, If No Claim Bonus (NCB) protection Cover is added , then you can register for a claim without any breakage of NCB claim.So, if the customer has this add-on cover , they can make a claim without any worry of losing benefits.
If the customer buy new bike and if he needs to transfer his NCB to his new bike following steps must be taken
NCB works as a gift provided by the insurer for every claim free year. It should be kept in mind that NCB can be claimed only if the bike insurance policy is renewed regularly that is within the expiry date of the previous policy which is approximately 90 days.
NCB is only given for its own damage’s component, not for thirty party cover.
20% for the first year for no claim, which increases by 25% in the second year, 35% for third year, 45% for fourth year and 50% for 5 claim free years.
|Year||No Claim Bonus Discount (%)|
|For first claim free Year||20%|
|Second claim free Year (continuous)||25%|
|Third claim free Year (continuous)||35%|
|Forth claim free Year (continuous)||45%|
|Fifth claim free Year (continuous)||50%|
And if any claim is registered during the insurance policy year the NCB will turn zero.
NCB is added to the customer’s account, which means if earlier the customer had a claim free 3 years and now he wants to buy a new bike then you can use that collective NCB benefit for the first premium of the new vehicle.
We can also understand with an example, if a customer buys a bike in 2008 and pays all his premium bills regularly, renews all the policy on time and claims free insurance for 5 years. He sold the vehicle in 2013 and bought a new one, for which the premium rate is rs.2,000. And suppose the own damage component for the premium is rs. 1, 500 .Then, because of earlier 5 years of NCB, the customer gets 50% discount for his new vehicle premium that means he has to pay rs.1000 instead of full amount rs. 2000.
If the insurance is taken online then you can claim for an NCB certificate which will be provided by the insurer. This may help you transfer NCB from one vehicle to another incase the insurance provider is getting changed.
Customers should try not to make any bike insurance claim or any damages to the vehicle because 1 claim can make your NCB value again zero and no discount will be provided until next year of the premium.
To make your NCB stronger customers can opt for protection and add on cover. Add on cover works for certain conditions like you don't have to claim at least for two years, only 1 own damage can be adjusted in a year, total loss claim cannot be accepted.Also Read - Ways to Get Discounts on Bike Insurance