Importance of No-claim Bonus in Two-wheeler Insurance

No claim bonus is a discount you can avail on the premium amount on your two-wheeler insurance if you haven’t made any claim. It is a reward that the insurer offers the policyholder for driving safely and not making a claim during a policy term. It’s a unique benefit through which your premiums can be reduced over a period of time.

According to Section 3 of the Indian Motor Tariff Act, an insured becomes entitled to NCB only at the renewal of a policy after the expiry of the full duration of 12 months. This discount applies to the own-damage component of the policy only and not a third-party component.

How does it work?

A No-claim bonus yields higher discounts for each claim-free year. After renewal in the first year, the policyholder receives a discount of 20%. This discount is raised to 25% in the 2nd consecutive year and 35% in the 3rd year. Upon renewing the policy consecutively in the 4th year, the policyholder gets a discount of 45%, and finally gets a discount of 50% in the 5th consecutive year. However, if any claim is made between the duration of these 5 years, the NCB discount will not apply, unless the policyholder has an NCB Protection Cover.

It should be noted that the no-claim bonus is nullified if you do not renew your policy within 90 days of its expiry date. Therefore, it gives you another reason to renew your policy on time.

Another benefit of NCB is that it is associated with the policyholder and not the vehicle. This means it is transferable to any other bike that you purchase. It can also be transferred to a new insurer.

What is NCB Protect add-on?

A situation could arise where you may have to inevitably raise a claim during the policy period. Doing so will prohibit you from enjoying the no-claim bonus. Therefore, to safeguard your interest, insurers offer NCB protect add-on cover that ensures your NCB remains intact even if you make a claim. So, NCB protect add-on allows policyholders to enjoy the benefits of a no-claim bonus despite raising a claim, by paying an additional premium amount.

To sum up

The no-claim bonus is a highly rewarding feature that not only motivates the policyholder to drive safely and follow traffic rules but also gives back lucrative discounts. So if you have two-wheeler insurance for which you haven’t made any claim, get ready to enjoy the benefit of the no-claim bonus.