What Is NCB in Bike Insurance? Importance & Facts You Should Know
Introduction
If you’re a responsible rider who hasn’t made any claims on your bike insurance, you’re in for a pleasant surprise during your policy renewal. This is where the No Claim Bonus (NCB) comes into play—a reward that can significantly reduce your premium.
In this comprehensive guide, we’ll explore what NCB is, how it works, its importance, and essential facts every bike owner should know.
What Is No Claim Bonus (NCB)?
No Claim Bonus is a reward offered by insurance companies to policyholders who have not made any claims during the policy term. It’s a way for insurers to encourage safe riding and reward claim-free years.en.wikipedia.org
The NCB is applied as a discount on the own damage component of your bike insurance premium. The longer you go without making a claim, the higher the discount you can avail.
How Is NCB Calculated?
In India, the NCB is structured as follows:
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1 year claim-free: 20% discount
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2 years claim-free: 25% discount
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3 years claim-free: 35% discount
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4 years claim-free: 45% discount
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5 years claim-free: 50% discounten.wikipedia.org
These percentages are applicable to the own damage component of your premium and can lead to substantial savings over time.
Importance of NCB in Bike Insurance
1. Significant Premium Savings
The primary advantage of accumulating NCB is the substantial reduction in your bike insurance premium. A 50% discount after five claim-free years can result in significant financial savings.
2. Encourages Safe Riding
By rewarding claim-free years, NCB incentivizes riders to adopt safer driving habits, leading to fewer accidents and claims.en.wikipedia.org
3. Enhances Policy Value
A higher NCB not only reduces your premium but also increases the overall value of your insurance policy, making it more cost-effective.
Key Facts About NCB
1. NCB Is Applicable Only on Own Damage Premium
It’s important to note that NCB applies only to the own damage component of your bike insurance premium. It does not affect the third-party liability cover, which remains unchanged regardless of your claim history.
2. NCB Is Transferable
You can transfer your accumulated NCB to a new bike insurance policy, even if you switch insurers. This ensures that you don’t lose out on the benefits of your claim-free years.
3. NCB Is Linked to the Policyholder
NCB is associated with the policyholder, not the vehicle. Therefore, if you sell your old bike and purchase a new one, you can transfer the NCB to the new policy under your name.
4. NCB Can Be Lost
If you make a claim during the policy term, your NCB will reset to zero. This means you’ll lose the accumulated discount, and your premium may increase upon renewal.
5. NCB Is Valid for a Limited Period
If you don’t renew your bike insurance policy within 90 days after expiry, your accumulated NCB may be forfeited. It’s crucial to renew your policy on time to retain the benefits.
How to Avail and Transfer NCB
1. During Policy Renewal
When renewing your bike insurance, inform your insurer about your claim-free status. They will apply the appropriate NCB discount to your premium.
2. When Switching Insurers
If you’re changing your insurance provider, provide proof of your claim-free years to the new insurer. They will verify the details and apply the applicable NCB discount.
3. When Purchasing a New Bike
If you buy a new bike, you can transfer your NCB from your old policy to the new one. Ensure that the NCB is recorded in your name and not linked to the old vehicle.
Common Mistakes to Avoid
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Not Renewing on Time: Delaying policy renewal can lead to the loss of accumulated NCB.
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Making Minor Claims: Avoid making claims for small damages, as it can reset your NCB to zero.
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Not Informing About NCB Transfer: Always inform your insurer about transferring your NCB when switching policies or purchasing a new bike.
Conclusion
Understanding and utilizing the No Claim Bonus can lead to significant savings on your bike insurance premium. By maintaining a claim-free record and renewing your policy on time, you can enjoy the financial benefits of NCB. Remember to transfer your NCB when switching insurers or purchasing a new bike to continue reaping the rewards.
FAQs
1. Can I transfer my NCB to a new bike?
Yes, you can transfer your NCB to a new bike under your name. Ensure that the NCB is linked to you as the policyholder.
2. Does NCB apply to third-party liability cover?
No, NCB applies only to the own damage component of your bike insurance premium.
3. How can I check my accumulated NCB?
You can check your accumulated NCB by reviewing your previous policy documents or contacting your insurer for details.
4. Is NCB applicable if I have a third-party only policy?
No, NCB is applicable only if you have the own damage component in your bike insurance policy.
5. Can I lose my NCB?
Yes, making a claim during the policy term can result in the loss of accumulated NCB, leading to higher premiums upon renewal.
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