What Is NCB Cover? Why Is It Important For Your Two-Wheeler Insurance Plan?
Published On Apr 14, 2021 11:00 AM By InsuranceDekho
NCB plays a major role in decreasing the premium for both wheels (OD Premium). The premium during two-wheeler renewal insurance is a great way of reducing the premium gradually as the proportion of this bonus rises as the policyholder does not register the year after the premium.
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A policy holder with two-wheeler insurance policy is eligible if in the previous policy year, he/she does not enter a claim. Sometimes, instead of making a claim with the insurance firm, the policyholder agrees to pay his own two-wheeler repair costs. In such a case, he/she is eligible for NCB, which is an insurance premium percentage discount paid by the policyholder at the two-wheelers policy renewal, but not when a new two-wheeler insurance policy has been bought so NCB will be nil in the future. This discount applies to the insurance plan's 'Own Damage Premium.' The reduction normally varies from 20% to 50%.
Why Does No Claim Bonus Matter?
The amount of the two-wheeler insurance premium NCB plays a significant role (OD Premium). The premium renewals of two-wheeler insurance is a great way to gradually decrease the premium over the years as the proportion of this bonus rises as the policyholder does not register a claim with the insurance company.
How Is NCB In Two-Wheeler Insurance Calculated?
After your first extensive 2-wheeler policy has been renewed, your no claim bonus kicks off. (Note that NCB only applies to Own Damage of the Premium component that is the premium computed on the basis of the IDV or proclaimed assured motorcycle value minus the cost of motorcycle wearing. The bonus is not for the premium coverage of third parties).
After your first year without claim, you begin with a 20% discount on your premium.At policy renewal every year, the discount rises by 5-10%. In other words, the discount is added every year you don't make a claim.For example, when you have 20% NCB at the end of the first year of policy, and you do not assert it in the second year or so, you will be reduced to 25%-30%, and then to 30%-35% in the following year, etc. In five years, you will get up to 50% off the premium.
When Do I lose NCB?
When you have made a claim, the NCB will be reset to zero regardless of which year you have a policy. This rule would not apply if the NCB protection feature is included in your policy.
Can I Make A Claim And Still Keep My NCB ?
No, you cannot keep your NCB intact if you make a claim during the policy period. However, if you opt for a NCB protection cover you can make a claim and still keep your NCB instact. Generally two claims are allowed by most of the insurance providers under the NCB protection cover. The add-on can be opted with standalone own-damage bike insurance plans as well as comprehensive bike insurance policies.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.