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What is No Claim Bonus (NCB) in Bike Insurance & How it Works?

Do you remember your childhood? Like, when you were 5 or 6 and your father would tell you that if you behaved well the whole day, studied hard, and did not make a nuisance, you would get a candy treat? A No Claim Bonus (NCB) is just like that: a candy for being a good, disciplined biker.

Now you may ask, what has a bonus got to do with good bike riding, right? If you have bought a bike insurance, but you have driven safely and maintained the bike properly, then you will not need to raise an insurance claim, because there is no damage to make a claim for!

What is No Claim Bonus in Bike Insurance?

Now, insurers say that if you drive safely and do not raise a claim for a year, on your policy renewal, you will receive a discount on the premium. This discount is called NCB. Formally, an NCB is defined as a discount on premium awarded to the policyholder for not making a claim during the policy year. To deter rogue claims and instill some type of discipline, the concept of NCB was introduced (though we love claims and helping out people!). The good news is, if you continue with good behaviour and if your bike never faces any issues, damage, or accidents, then you can accumulate your NCB over the years.

What is the Full Form of NCB in Bike Insurance?

NCB full form in bike insurance is No Claim Bonus, which, as the name suggests, offers a bonus renewal discount on the bike insurance premium if you do not file a claim in the previous policy years.

What is the Significance of NCB in Bike Insurance?

NCB means, in bike insurance, a bonus discount, which rewards you for not filing claims during a policy period. Therefore, it is quite significant in bike insurance, as NCB helps save money over time by offering a discount on the renewal premium.

Also, NCB benefits in bike insurance are more as they get accumulated over time for all the policy years you don’t make a claim, thus increasing the potential discount to a maximum of around 50% of the policy premium at the end of five consecutive claim-free policy terms.

How NCB in Bike Insurance Works?

While everything in motor insurance increases in price with time, you can still reduce your bike insurance premium as the policy years increase! This special benefit is offered by NCB in bike insurance, which works almost like a rewards system.

You start by getting a 20% discount if you haven’t made any claim in your first policy year.
Consequently, your discount keeps accumulating each year by 5-10% from your second claim-free year.
The maximum NCB in bike insurance goes up to 50% over five consecutive claim-free years.

So, in simple words, NCB works by rewarding you with a discount on your policy premium; the better driver you are, the more you save!

How Does NCB Affect Premium Calculation?

Don't be greedy because after five years, the discount will not increase, even if you don’t raise a claim in a year. Now let us calculate what the current NCB is in bike insurance with a simple example.

You bought a suave high-speed bike in 2010. There could not be another ideal biker, a.k.a. policyholder, in the world like you. You paid your premium on time. You did not raise a claim in the first year or the second year…or the fifth year. Now, you thought, you have had enough of this bike. You sell this bike and instead bring home another slick model in 2015. You have, along with your new bike, gotten your bike insurance as well. Suppose the own damage premium for the new vehicle is ₹3000. But you have accumulated NCB for 5 years. So, you will get up to a 50% discount on the premium for your new vehicle. You will only have to pay ₹1500 for your own damage premium!

How to Calculate NCB for Bike Insurance?

Your no-claim bonus kicks in ONLY after the first renewal of your comprehensive two-wheeler insurance policy. (Note that NCB exclusively applies to the own damage component of your premium, which is the premium calculated based on IDV in bike insurance minus the cost of the bike’s wear and tear. The bonus does not apply to third-party cover premium.

You begin with receiving a 20% discount on your premium after the first claim-free year. The discount increases by 5-10% at the time of policy renewal each year. In other words, each year that you do not raise a claim, the discount is accrued, almost as if the reward for the policyholder’s good behavior keeps getting meatier.

To understand NCB calculation for a bike, let us take an example.

If you get 20% NCB at the end of the first policy year and you do not make a claim in the second year either, the discount on your premium will go up to 25-30%, then 30-35% in the consecutive year, and so on. This way, you can get up to a 50% discount on your premium in 5 years.

Check: Use Bike Insurance Calculator to get the bike insurance premium with the NCB discount.

No Claim Bonus Rates in Bike Insurance

Claim Free Years	No Claim Bonus
After 1 year	20%
After 2 years	25%
After 3 years	35%
After 4 years	45%
After 5 years	50%

Can I Transfer NCB When Buying a New Bike?

Yet another good news is, the accumulated NCB bonus is like the famous pug, it goes with you wherever you go. That is, it is transferable from your old vehicle to new vehicle, if you decide to buy a new bike, as long as you remain the policy holder. Your NCB is for YOU as the policy holder and not for your bike.

How to Transfer NCB to New Bike Insurance?

Online

Offline

If you’re going to buy your new bike insurance policy online, all you need to do is provide your old insurance policy number and the right NCB, and the name of the insurer; the rest of the process your new insurance company will manage.

In case you are buying your new two-wheeler insurance policy offline or via an agent, you will have to transfer your NCB by submitting your buyer-seller agreement- Forms 29 and 30. You will also need to write a letter requesting the transfer of your NCB from your existing insurance company. Your old insurance company will then issue an NCB certificate which you’ll need to submit to your new car insurance company.

How to Get NCB Certificate Online?

An NCB certificate is provided at the time of buying a two-wheeler insurance policy; it is used at the time of filing a claim or asking for an NCB discount. To get a No Claim Bonus (NCB) certificate, the policyholder must contact the insurance provider and request one. For that, he needs to provide your policy number and personal and vehicle details. After verifying the details, the insurer will issue the NCB certificate.

Documents Required for Transferring NCB in Bike Insurance

You have to provide the following documents along with the application:

Delivery Note of Sale of Old Bike

Old Bike Insurance Policy

Booking Form of Purchasing Bike

Transfer Application

Buyer-Seller Agreement

Old RC Transfering

NCB Certificate from Insurer

When is NCB Cancelled?

The NCB is reset to zero once you have raised a claim, irrespective of whichever year of your policy it is. Is there an exception to this? Of course, there is. If you have an NCB protection feature added in your policy, then this rule will not apply.

Is There a Way I Can Make a Claim and Still Retain My NCB?

Yes, there is a way, depending on whether your desired insurance company provides the benefit or not. If your insurer allows it, you can go for an NCB Protect add-on as part of your comprehensive policy. With this feature, you can make a specific number of insurance claims (mostly just one) in a year without losing your no-claim bonus. Some insurers may also put a condition on the number of years you should have gone without making a claim on your policy before the protection feature kicks in.

How Much Does NCB Protection Add-on for Bike Insurance Cost in India?

The NCB Protection Add-on can be bought for an additional premium over the base bike insurance policy. This means that NCB cannot be purchased independently and can only be bought along with a comprehensive or standalone own-damage two-wheeler insurance policy. Also, the premium of NCB varies from insurer to insurer, which is roughly between 5% to 10% above the standard bike insurance policy; you should check the same with your insurer.

What's Not Covered in NCB Protection Add-On Cover?

Following are the cases where NCB add-on will not be applicable in two-wheeler insurance:

When the number of claims has exceeded the allowed number under the NCB Protection add-on.

When fraudulent damage-related claims are raised or if there is any discrepancy in the facts regarding a claim.

NCB will be cancelled if the bike insurance policy is expired or not renewed within 90 days of the expiry or stipulated date.

If you try to include or remove the NCB Protection cover mid-term.

Another condition for NCB is that your two-wheeler must be repaired in the insurance company’s network garage.

What are the Benefits of NCB in Bike Insurance?

Here are the advantages of retaining your NCB in bike insurance:

Important Things to Remember about NCB in India

The following are some important things to know about No Claim Bonus in bike insurance in India:

The NCB is available only with the Comprehensive Two-Wheeler Insurance Policy and not with the Third-Party Liability Plan.
NCB will terminate if you file a claim even a single time.
NCB can be easily transferred to the new two-wheeler; just ensure you have the NCB certificate.
Do not cancel your insurance policy before the end of the policy term as then your NCB will also be cancelled for that year.
NCB validity is 90 days from the date of expiry of the policy, so remember to renew the bike insurance policy within time.
It is important to know that you cannot share the NCB benefits between two different bike insurance policies.

So, the next time you are in the mood for some bike racing, remember there is a No Claim Bonus waiting for you on the other side of self-control. Also worth remembering is the fact that this reward is transferable to new vehicles and new insurers.

Pro Tip! Keep Your NCB. Let go of small change. In other words, in the long run we have seen that making a claim for small damages to the vehicle, that is totally affordable, will make you lose on a substantial chunk of discount on your premium, because the NCB, on even making a single claim will switch back to zero, which looking at the larger picture, will be a bigger financial loss. So, it is best to keep your NCB alive and settle minor damages without raising a claim.

FAQs about No Claim Bonus in Bike Insurance

All

What if I change my insurance provider when I buy a new vehicle?

To be honest, we would hate to see you go. But go, if you must, the NCB is transferrable to new vehicles and new insurers, provided you continue to be the policy holder. Only you will need to get a clearance certificate from your previous insurer to allow the NCB transfer to another insurance company.

Can I pass on the NCB to a family member or friend?

No, you cannot. NCBs are awarded to you as a policy holder and they cannot be transferred to another person, even when you sell your bike. The only exception to the rule is death of the policy holder, in which case, the NCB will be transferred to the nominee.

Does NCB apply to third-party bike insurance?

No, the NCB does not apply to the third-party liability policy. You need to have a Comprehensive or Own Damage bike insurance policy. However, a third-party claim does not affect your NCB.

How does NCB affect my bike insurance premium?

NCB reduces your bike insurance premium. If you don’t make any claims in your first policy year, you get a 20% discount on your premium at renewal. This discount increases for each year you don’t make a claim, up to a maximum of 50%.

What happens to my NCB if I raise a claim for a small incident?

Any claim, regardless of its size, will reset your NCB to zero. However, with an NCB Protection cover, you can make a certain number of claims without losing your NCB.

Is a No Claim Bonus an add-on?

No, the NCB is not an add-on. It is a benefit you can buy along with standard bike insurance policies.

How long is NCB valid for?

Your NCB remains valid until you make a claim.

Can I transfer my NCB from one insurer to another?

Yes, you can transfer your NCB when switching insurance providers. During the renewal process with your new insurer, you just need to provide your previous policy document and NCB certificate.

What if my NCB is zero?

If your NCB is zero, you will not receive any discount on your bike insurance premium at renewal.

What is the maximum NCB discount I can avail in India?

The maximum NCB discount for bike insurance in India is 50%, which you can get after five consecutive claim-free years.

When is a No Claim Bonus in Bike Insurance Applied?

NCB in bike insurance is generally applied when you renew your two-wheeler insurance policy. But note that it is only available with the Comprehensive and Own Damage policy, but not the Third-party policy.

Written By:

Manasvi Gupta

Reviewed By:

Mayur Kacholiya