If you have been buying two wheeler insurance for quite some time, you would have come across a piece of advice that states one should not raise claims for a small amount. Also, two-wheeler insurance should be used to receive compensation where the repair cost of your damaged two-wheeler is a lot. Many of us wonder why do experts advise against raising a claim, as it defies the purpose of buying two wheeler insurance. Policyholders often ask themselves this question – Why should I pay for the damage from my pocket when I have insurance?
It is important to understand that bike insurance is a backup plan for saving money in case of major damage. Insurance is not a go-to solution when your bike gets scratched or suffers minor bumps. In this article, we will understand the importance of not raising claims for minor repairs in detail and also why buying online two wheeler insurance is beneficial for you.
How to Reduce Your Bike Insurance Premium by avoiding Small Claims?
When you buy a comprehensive bike insurance policy, you get to see an impressive list of inclusions. They include the cost of repairing damages due to an accident, damages due to a natural or man-made calamity/fire, cover for theft of the insured two-wheeler and much more. You may have also bought a zero depreciation add-on that would help you get the maximum claim amount in case of damage. This can lead you to think that it is beneficial to raise a claim for all kinds of damages irrespective of their magnitude. However, this is not the case.
In the world of bike insurance, something called NCB is considered to be the biggest discount you could get on your bike insurance premium. Guessing what NCB stands for? It is nothing but an abbreviation of No Claim Bonus (NCB). Since this discount is cumulative in nature it increases with each claim-free year. Take a look at the following table to know how it increases increase each year:
|No. Of Claim-free Years||Discount|
|One claim-free year||20%|
|Two consecutive claim-free years||25%|
|Three consecutive claim-free years||35%|
|Four consecutive claim-free years||45%|
|Five consecutive claim-free years||50%|
As the name suggests, it is a discount awarded by the insurance company for not raising a claim. Thus, as soon as you raise a claim, your discount will drop to zero and the NCB cycle will reset. For example, your car has crossed five years of age and you have not raised any claim during those years. Now you feel like getting all the scratched and small dents from minor accidents repaired and thus you raise a claim without understanding that this will reset your NCB cycle. At the time of renewal, you realize that the cost of your policy has increased exponentially. And, this caused more financial losses than the repair cost for minor damages. Thus, you need to raise a claim only for major repair costs, theft, or third-party incidents.
Note: NCB does not affect the premium of the third party two wheeler insurance. This is because the third party two wheeler insurance doesn’t cover the damage of the insured bike.
Why Buying Online Two Wheeler Insurance is Beneficial?
When you buy an online two wheeler insurance policy, you get an additional discount. This is because the cost of an online two wheeler insurance policy is less than its offline counterpart. The same insurance company can afford to sell the online policy at a cheaper rate because the operational cost behind it is less.
Another important aspect of buying online two wheeler insurance is that it is not a time-consuming process. You do not have to wait for your policy to arrive by post and thereby delay riding your bike. Here, you receive the soft copy of your bike insurance policy within minutes of making the payment in case inspection is not required.
One of the major benefits of buying the policy online is that you can buy a better policy when you compare two wheeler insurance online. If you compare two wheeler insurance offline, it will take a lot of time and effort to go through each unique feature or service offered.
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