Explain IDV and NCB in Bike Insurance

Riding a bike on Indian roads is never safe. You need to be an adept driver to avoid any accidents while driving your two-wheeler. Otherwise, there can be an unforeseen circumstance leading to personal and vehicle damage. So, even if you encounter such events, having bike insurance will help you avoid financial loss. But you need to pay a regular premium for any bike insurance policy, for which you need to know two important terms, which are Insured Declared Value (IDV) and No-Claim Bonus (NCB). 

Keep reading this space to learn more about these important terms to help you calculate your premium and get maximum coverage. 

Insured Declared Value (IDV) is the maximum amount the insurance-providing company pays if the bike is damaged beyond repair or stolen. A higher IDV provides better financial coverage, but you need to pay a higher premium. Similarly, lower premiums for lesser IDV may not provide the required coverage during uncertainties.
 

Here is the formula used to calculate IDV for bike insurance without accessories:

Most policyholders either underestimate or do not understand the importance of IDV in their policy coverage. It is an important factor in calculating the claim settlement amount and premium rate. So, the impact of IDV on the bike insurance premium rate is:

You must consider this factor while selecting your bike insurance policy coverage to avoid significant financial setbacks. The insurance company will only reimburse the amount claimed and the IDV included in the policy. So, for a fair insurance payout, a higher IDV can be beneficial for a bike’s repair or replacement. 

No Claim Bonus (NCB) is a reward from the insurance company to the insured for not claiming any insurance for a certain period. The insurance company considers you to be a safe client and gives you an additional amount above your total coverage amount under this scheme. Moreover, it acts as a discount on the renewal premium, making your bike insurance more affordable. 
 

The NCB add-on to your comprehensive bike insurance policy plays an important role. It not only promotes safe driving but also ensures drivers are accountable on the road and understand the importance of safe driving. Furthermore, this feature can be easily transferred if you change your insurance provider. Also, it is easily renewable, making it a popular add-on feature among bike insurance policyholders. 

The following table shows the calculation of NCB for bike owners:

Being a responsible driver on Indian roads pays off. Understanding Insured Declared Value (IDV) and No Claim Bonus (NCB) is key to making informed bike insurance choices. IDV helps determine the payout in case of theft or total loss, while NCB rewards safe driving with lower renewal premiums. Including both in your policy ensures maximum value and protection, all while keeping your insurance cost-effective and aligned with your needs.
 

1.May I select a custom IDV for the bike insurance?
Yes, several insurers permit policyholders to announce their desired IDV within a specified range. But announcing a much lower IDV might decrease your premium, but it can leave you with insufficient compensation.

2.What is the fate of my NCB if I change insurers?
NCB can be transferred. If you switch your bike insurance company, you can keep your accrued NCB by requesting an NCB certificate from your old company and presenting it to the new one.

3.Is NCB available on third-party bike insurance plans?
No, NCB is only for the own-damage part of comprehensive or standalone own-damage bike insurance policies, not for third-party policies.

4.Is NCB forfeited after making a single claim?
Yes, a single claim within a policy term can render your NCB accumulation nil unless you have an NCB protection add-on cover.

5.How frequently should IDV be renewed?
IDV should be reviewed once a year during the policy renewal, taking into account depreciation and the prevailing market price of the bike.

6.Can IDV influence claim settlement?
Yes, a wrong IDV can result in claim disagreements. A very low IDV can result in underpaying, and a bloated IDV can result in rejecting claims or suspecting fraud.