Regarding bike insurance, riders always prioritise saving money while maintaining adequate coverage. One of the most effective ways to reduce your insurance premium over time is to take advantage of the No Claim Bonus (NCB).
Insurers offer this reward for every claim-free year, helping policyholders enjoy significant discounts on their premiums. But how does NCB work, and how can you maximise its benefits? Let’s learn how NCB in bike insurance can help you save money year after year.
What is No Claim Bonus (NCB) in Bike Insurance?
The No Claim Bonus (NCB) is a discount offered by bike insurance providers to policyholders who do not file any claims during their policy term. It serves as a reward for responsible riding and can be accumulated over consecutive claim-free years.
The NCB percentage typically ranges from 20% to 50% and can be maximised over five years. This benefit is available only with own-damage or comprehensive bike insurance policies, meaning those with third-party insurance are not eligible for NCB.
However, in the unfortunate event of the policyholder’s passing, the accumulated NCB can be transferred to their nominee.
Benefits of NCB in Bike Insurance
Here are some of the key benefits offered by NCB in bike insurance:
- Lower Premium Costs: NCB helps reduce bike insurance premiums, offering discounts ranging from 20% to 50%. This makes maintaining comprehensive coverage more affordable over time.
- Reward for Responsible Riding: Insurance providers offer NCB as a reward for safe riding, acknowledging policyholders who do not file claims during the policy term.
- Transferable Advantage: NCB is linked to the policyholder, not the bike. You can retain and transfer your accumulated NCB even if you sell your bike or switch to a different insurer.
- Increased Savings Over Time: By accumulating NCB over consecutive claim-free years, policyholders can enjoy substantial long-term savings, freeing up funds for other important expenses or biking upgrades.
How is NCB in Bike Insurance Calculated?
The Insurance Regulatory and Development Authority of India (IRDAI) has set predefined discount rates for policyholders based on their consecutive claim-free years. The longer you go without filing a claim, the higher the discount you receive on your premium.
The following table outlines the NCB percentage based on the number of claim-free years:
| Number of Consecutive Claim-free Years | NCB Discount Percentage |
| 1 year | 20 % |
| 2 years | 25% |
| 3 years | 35% |
| 4 years | 45% |
| 5 years | 50% |
Note: The maximum discount is capped after five consecutive claim-free years.
Let’s break down how NCB is calculated with an example:
Suppose you own a bike and do not file any claims during the first policy year. As a result, when you renew your insurance, you receive a 20% NCB on your premium. If you continue to avoid claims, your NCB increases as follows:
- 2nd claim-free year: NCB rises to 25%
- 3rd claim-free year: NCB increases to 35%
- 4th claim-free year: NCB reaches 45%
- 5th claim-free year: You achieve the maximum 50% NCB
After five consecutive claim-free years, you can save 50% on your premium, paying only half the amount. This demonstrates how accumulating NCB over time can lead to significant cost savings on bike insurance.
How Does NCB Reduce Insurance Premiums?
The No Claim Bonus (NCB) only applies to the Own Damage (OD) premium in a comprehensive two-wheeler insurance policy. The total premium for comprehensive bike insurance consists of the following components:
- Own Damage (OD) Premium: This covers damage to your bike due to accidents, theft, or natural disasters.
- Third-party Liability (3PL) Premium: Mandatory as per IRDAI regulations to cover damages to others.
- Personal Accident Cover (PAC) Premium: Provides coverage for the owner-rider with a minimum mandated sum of Rs 15 lakh.
- Add-on Cover Premium: Additional protections like engine protection, zero depreciation, etc.
Since third-party liability and PAC premiums are regulated by IRDAI, the NCB discount applies only to the OD premium. Also, opting for or removing add-on covers does not impact the NCB calculation. Thus, the formula for a comprehensive two-wheeler insurance premium is:
Total Premium = OD Premium + 3PL Premium + PAC Premium + Add-On Cover Premium – NCB on OD Premium
How to Retain NCB Even After Switching Insurers?
If you decide to switch insurers or purchase a new bike, you don’t have to lose the No Claim Bonus you’ve accumulated. You can transfer your NCB to the new policy, allowing you to continue enjoying the discount on your premium. To retain your NCB, follow these steps:
- Obtain an NCB Certificate: Request an NCB retention letter from your current insurer when canceling your existing policy.
- Provide the Certificate to the New Insurer: When purchasing a new policy, submit the NCB certificate and policy details.
- Complete the Transfer Within 90 Days: To retain the benefit, ensure the transfer is processed within 90 days of your previous policy’s expiry.
You will need to submit the following documents for NCB transfer:
- Copy of the previous insurance policy
- NCB certificate from the previous insurer
- Identity proof (if required)
- Vehicle registration certificate
By transferring your NCB in bike insurance, you can save on premiums even when changing insurers or upgrading to a new vehicle.
No Claim Bonus is a valuable benefit in bike insurance that rewards responsible riders with significant savings on their premiums. By maintaining a claim-free record, policyholders can accumulate discounts of up to 50% over five years, reducing the financial burden of renewals.
Since NCB is transferable, switching insurers or upgrading to a new bike does not mean losing this advantage. By leveraging NCB effectively, riders can enjoy comprehensive coverage at a lower cost while encouraging safe and responsible biking habits.
