Home / Two-wheeler Insurance / Articles / What is No Claim Bonus (NCB) in bike insurance?
Team AckoOct 14, 2022
Being aware of bike insurance terms can go a long way in helping you save on your policy premium and make an informed decision while buying the bike insurance policy. “NCB” is one such term that is commonly used in motor insurance. Read ahead to know what NCB is in bike insurance.
NCB in two-wheeler insurance is a discount that an insurer may award if you are riding your bike safely and not raising any claims during the policy period. So, ensure you take good care of your bike through regular services and try to avoid damages by riding safely. Following these will help you to take advantage of the NCB feature offered on your bike insurance policy.
In bike insurance, the full form of NCB is No Claim Bonus. As the name may suggest, a No Claim Bonus in bike insurance is an incentive offered by insurers to customers who do raise any claims during a policy term. The incentive offered is in the form of a renewal discount on the policy premium.
You may wonder how NCB percentage for bike insurance is calculated. Based on the claim-free years, the Insurance Regulatory and Development Authority of India (IRDAI) has set the limit of discounts insurance companies can offer to the insured. The percentage of the discount increases every consecutive claim-free year. However, the discount will cease to increase after the completion of five continuous claim-free years.
Here’s a table featuring the NCB discount (on Own Damage component) in percentage for two-wheelers. It will help you understand the impact of NCB on policy premiums.
|Claim-free Year||NCB Discount (%)|
|After the first year||20%|
|After the second year||25%|
|After the third year||35%|
|After the fourth year||45%|
|After the fifth year||50%|
By not raising any claims during the policy period, you get to retain the No Claim Bonus (NCB) on your 2-wheeler insurance and receive benefits listed below.
If you do not raise a claim during the policy period, the NCB is offered as a discount while paying the renewal premium. So, you can take advantage of the financial benefits that it offers during policy renewal. It may encourage you to drive your vehicle safely and adhere to the traffic rules.
The NCB that you earn for driving safely and not registering a claim, belongs to you. Hence, if you are switching insurance providers, it can be transferred to the new insurance company and you can enjoy its benefits from there.
NCB is important for two-wheeler insurance because it helps you save costs on the policy premium. Under NCB, after the completion of every claim-free policy term, you can get a discount on the policy premium during policy renewal.
This can add up to a reduction of around 50% of the policy premium at the end of five back-to-back claim-free policy terms. So, you can significantly reduce your expenditure on bike insurance and save your hard-earned money.
NCB Protection Add-On Cover in bike insurance is an optional cover you can buy to safeguard your NCB from being affected by raising claims. Usually, NCB is awarded only if no damage-related claims are made during a policy term. Thus, even if you raise a single claim, you will become ineligible to receive NCB for that policy term. Nevertheless, if you buy an NCB Protection Cover, your NCB will be safe even if you raise a claim. So, if you have this add-on, you can make a claim without worrying about losing your NCB.
The following are the usual inclusions under an NCB Protection Add-On Cover.
It is available only under Comprehensive Bike Insurance.
It protects your No Claim Bonus while raising a damage-related claim.
Under this add-on, you can usually raise up to two claims per year (please refer to the policy wordings for a precise number of years) without incurring a loss on the NCB.
Policy renewal must be completed under the same insurer for this add-on to be applicable.
The following are the usual exclusions under an NCB Protection Add-On Cover.
When ineligible claims are raised.
Claims raised in the event of theft or total loss.
If fraudulent damage-related claims are raised.
Distortion of facts while raising a claim for damages.
Usually, the premium charged for a No Claim Bonus Protection is around 5 to 10% of the policy premium. However, the cost of NCB Protector Add-on usually varies between insurance companies. Hence, you should check with an insurer or go through the policy wordings before buying an insurance plan. Alternatively, you can get the details while using the bike insurance premium calculator when you include the add-on.
If you are buying a new bike, you can transfer the NCB to the new bike using the following steps.
Step 1: Inform your insurer that you are changing your bike insurance plan to a new one.
Step 2: Get an NCB transfer certificate from your old insurer by submitting a delivery note by the new buyer. After that, give it to your new insurer.
Step 3: Submit the buyer and seller agreement forms (Forms 29 and 30).
Step 4: Pay the policy premium of the new bike insurance plan and enjoy the discounted cost.
Here are the documents required while transferring the NCB from your old insurance to the new bike insurance:
NCB Transfer Certificate from the insurance company.
Buyer/Seller Agreement (Forms 29 and 30).
The delivery note provided by the new buyer to get the NCB Transfer Certificate.
The No Claim Bonus (NCB) can be cancelled or terminated due to the following reasons:
In case you make a claim during the insurance tenure.
If you do not renew the policy within 90 days of the expiry date, the NCB stands nullified.
NCB is not available with the Third-Party Bike Insurance Plan. It is only available with the Comprehensive Bike Insurance Policy.
Here are a few things to remember and understand about the No Claim Bonus (NCB) on bike insurance:
The NCB is offered only with the Comprehensive Two-Wheeler Insurance Policy and not with the Third-Party Liability Plan. Ensure you choose the former to enjoy the discount of NCB.
The NCB is awarded in the form of a renewal discount by the insurance company for riding your bike safely and for not registering any claims during the policy period. Hence, avoid raising bike insurance claims for minor expenses to ensure NCB retention.
The NCB is terminated in case you fail to renew the policy within 90 days of the expiry date. Thus, a lapse in insurance renewal will impact the NCB. Hence, ensure you renew your two-wheeler insurance within the expiry date.
You can transfer the NCB from your existing insurance policy to the new bike insurance when you sell the bike. The insurance company allows you to transfer the NCB to another insurance company by issuing an NCB Transfer Certificate.
For whatever reasons, do not cancel the bike insurance policy before the tenure ends as the NCB for that year will also be cancelled and you may not be able to take advantage of the discount.
The NCB that you earn for not raising any claim during the policy period cannot be shared between two different bike insurance policies.
No, you cannot use the NCB for more than two vehicles or bikes. Because, the NCB is awarded for the policy for which a bike or two-wheeler has been insured. You cannot use the benefit you received for one policy in a different policy.
Yes, it is possible to transfer NCB from your old bike to your new bike. However, this can be done only after the old bike has been sold.
Yes, you can raise a claim and still retain your NCB Protection Add-On. The number of times you can raise a claim during the policy period can differ between insurers. It is usually limited to only two claims to protect your NCB with the Add-on, after which the NCB gets nullified.
Yes, the NCB expires if you do not renew the policy within 90 days from the expiry date.
Yes, the No Claim Bonus is transferable. You can transfer the benefit of NCB of your old vehicle to a new vehicle once the old bike is sold to a buyer.
No, the NCB you have earned on your bike insurance cannot be transferred to a friend or family member. This is the case even if you sell your bike to them. This is because the NCB is applicable only for the insured and no one else can avail of it. However, in the unfortunate event of death to the insured, the NCB will be transferred to the dependent of the insured nominated under the plan.
You can find out the NCB that your bike insurance is eligible for by referring to the NCB slab listed in this article. The policy document will also usually contain the applicable NCB calculation. Alternatively, you can check the earned NCB during bike insurance renewal.
To transfer the NCB to new bike insurance, you must ensure you procure the NCB Transfer Certificate from your existing insurance company. Ensure you submit the document along with the Form 29 and 30 (buyer/seller agreement) and you would be able to transfer the No Claim Bonus to the new two-wheeler insurer.
Yes, you will lose your NCB if you raise a claim and the insurance company pays the repair bill by settling your claim. However, if the other person raises a third-party claim through their insurance company, your NCB policy will remain intact.
NCB 50 bike insurance refers to when you can avail of up to 50% discount on the policy premium by accumulating your NCB for five consecutive years.
NCB recovery refers to the transfer of the NCB while switching insurance plans or while shifting your bike insurance to a new bike.
Since, NCB is a reward, it cannot be selected. You will receive it only after the completion of a claim-free policy term.
The loss of NCB occurs when a claim is raised during a policy term.
Yes, there is a way a claim can be raised without losing the NCB. Usually, raising even a single claim can cause the loss of the NCB. However, if you buy a NCB Protection Add-On Cover, you can safeguard your NCB from being affected by raising claims. Usually, you can raise up to two claims during a policy term without the NCB being affected.
Yes, it is possible to avail of NCB for your second hand bike, provided you transfer your accumulated NCB using an NCB transfer certificate.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions. Explore More:
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