Does NCB Add at the Time of Two Wheeler Insurance Renewal?

Almost all vehicle insurance companies offer NCB (No Claim Bonus) to their customers who do not raise claims during the coverage period of the insurance policy. This “bonus” is basically in the form of a discount on the premium that is applied to your two wheeler insurance renewal. This bonus varies from one insurer to another. This feature must be taken considered while buying a two wheeler policy as you can lose quite a bit if you don’t look around while buying a two wheeler insurance policy. No claim bonus is given by the insurer to two wheeler policy holders for making claims during the policy term.

What is NCB

As mentioned earlier, NCB is a discount on your premium if you did not make a claim during the term of the policy. 

NCB can be accumulated through the years and you can get discounts ranging from 20% to 50% as shown in the table below. 

NCB increases for every year of no claim

At the end of first claim free year	NCB entitled 20%
At the end 2 consecutive claim free years	25%
At the end of 3 consecutive claim free years	35%
At the end of 4 consecutive claim free years	45%
At the end of 5 consecutive claim free years	50%

Note: 

If you have any claim during this period, then your NCB drops down to 0%. 

No NCB is applicable If the policy is not renewed within 90 days from the date of expiry of your existing policy.

NCB can be transferred from one insurer to another insurer. 

Accelerated Policies

Normally you are entitled for NCB when you renew the policy and you have not made a claim. Some insurance providers offer accelerated policies where you have the advantage of earning a bonus in 10 months rather than 12. 

Can one Policy be Applicable to Two Vehicles?
NCB is only applicable to one vehicle. However, it can be transferred to another vehicle. The policy will not cover an additional vehicle. The additional vehicle has to be cover by a separate policy. 

How Does it Work

If a policy holder has a IDV (insured declared value) of Re 4 lakhs and has paid a premium of Rs 12,000 then he is entitled to a 20% discount if no damage claim was made during the term of the policy. When the policy is renewed the premium would be Rs 9,600 which would give him a savings of Rs 2,400. The bonus percentage increases with every no claim year giving the policy greater savings. 

Transferring NCB

Since policies are issued to a policy holder and not to the vehicle, the holders are entitled to NCB even if they have changed their vehicle. It is transferable to cover the new vehicle that the policy holder purchases. 

When the holder changes the insurance provider, the NCB is automatically transferred – most cases. In some cases, where the insurer is not satisfied, then they will probably ask for a No Bonus Certificate and issue the policy in good faith. 

Will the NCB be affected in case of an accident or theft

When an accident takes place, the insurer will recover the major portion of its expenses from the other party. For instance, if it is the driver’s fault then a portion or entire no claims will be forfeited. Where a third party is involved and the responsibility cannot be established, then the expenditures will be divided into two and your NCB will be affected. 

Should I or Should I not File for a Claim

If you unfortunately meet with an accident, then you would be wondering whether to file claim or not. It the cost of repair is high then you definitely file a claim. However, if the repair charges are low then it is better not to claim since it will affect your NCB for the next year and will also increase your premium amount. 

Some Things to Remember...

• You can transfer NCB from one vehicle to another even when you change your insurer provider. In this case the first insurer has to provide you with an NCB certificate. You can also avail of your NCB when you purchase a policy online.
• NCB can’t be transferred to another person. However it can be transferred to a legal heir or a nominee who is mentioned in the policy after the death of the policy holder.
• If you want to keep your NCB intact you should avoid making small claims that do not require a lot of expenses. If you do it will not only affect your NCB it will also increase your premium mount.
• You can opt for NCB protection add on cover that will ensure that your NCB is not affected. However, there are some limitations and differ from insurance companies. This add-on will works well only if you have not claimed for the previous two years or it may allow only one claim in year. Also it is not applicable where the vehicle is a total loss.