All You Need to Know About No Claims Bonus for Two Wheeler Insurance

No Claims Bonus (NCB) is a discount you can avail of on the premium payment for motor insurance if you do not claim during the period of the insurance policy. This is applicable for both car insurance and two-wheeler insurance, but only in comprehensive policies and not on simple third-party policies.

The points of importance in the context of an NCB are:

1. NCB is like a gift by the insurance provider for not making any claims in the previous 1 year (or 3 years, depending on your policy tenure). NCB can be claimed only if you renew the insurance policy regularly, at least within 90 days of the expiry of the previous policy.
2. It is available only on the own damage component of the premium, and not on the third-party cover.
3. The proportion of NCB rises each year, from 20% after the first year without any claim, to 25% at the end of the second claim-free year, 35% after the third year, 45% after the fourth year and 50% at the end of 5 claim-free years.
4. NCB is accrued to your account and not to the account of your vehicle. This means that if you do not make any claim for 3 years and you sell your bike to buy a new one, you can avail of NCB benefits accrued by you in the previous 3 years on the first premium for the new vehicle as well. However, you cannot transfer the NCB from a to a four-wheeler insurance policy.
5. For example, you buy a scooter in 2009 and pay premiums regularly, renew the policy on time, and make no insurance claims for 5 years. You sell the vehicle in 2014 and buy a new one, for which the premium is Rs.2,500. The damage component in the premium is Rs.2,000. With 5 years of NCB, you are eligible for a 50% discount on your new vehicle's premium, which means that you only have to pay Rs.1,500 instead of Rs.2,500 as a premium for the new scooter.