Articles 139 views November 12, 2019

No-Claim Bonus in Multiyear Two Wheeler Insurance Policy

No claim bonus is a very handy motor insurance component. It is a reward you get for being a good and responsible rider. If you do not make any claims, you get a reward when you get a motor insurance renewal done. The reward is offered as a discount on the premium of the following insurance policy period. You get to save money in this manner and make an economical purchase. The NCB, as it is popularly known, is available on a standard one-year bike insurance cover as well as on the multi-year policies. In this article, we discuss the NCB clause in the multi-year vehicle insurance plans. Read on to know more.

Understanding the no claim bonus

Let us begin our discussion by understanding what the concept behind the no claim bonus in motor vehicle insurance is.

  1. Eligibility – You are eligible for an NCB discount if you do not make any bike insurance claim during the policy period. You have to be a careful rider, follow all the traffic rules and ensure you do not get involved in any traffic accidents. If you do not have mishaps, you will not need to make insurance claims as well, and your NCB will build up. Similarly, keep your bike safely to ensure there are no thefts.
  2. Discount – The NCB is offered as a discount on the motor insurance premium of the following year. The IRDAI has specific guidelines regarding the rates of discounts offered as NCB. The NCB accumulates every year and the longer you go without making a bike insurance claim, the higher the amount of NCB you earn.
  3. Negation – If however, you make even a single claim, the entire accumulated NCB gets negated. you can buy an NCB protection vehicle insurance rider and stay protected against losing all your NCB at one go.

These are the clauses associated with the no claim bonus in a standard one-year bike insurance plan. But as you know, bike insurance is also available in multi-year plans. In the section below, we will see how the NCB is calculated and offered in a multiyear two-wheeler insurance policy.

No claim bonus in a multiyear plan

When you buy a multiyear bike insurance policy, the no claim bonus calculations are done in a different manner. Some insurance providers offer a flat discount rate for the entire term of the vehicle insurance policy. The best part about a multiyear plan is that you get to retain the bonus, even if you make a few insurance claims over the duration of the long term bike insurance cover. this is a very helpful clause that allows you to ride your vehicle with greater mental peace.

Calculations in multiyear plan’s NCB 

Let us now take a detailed look at how the NCB calculations are carried out in a long term bike insurance cover:

  1. Uniform rate – As mentioned above, some insurance companies offer a flat rate of discount for the entire duration of the vehicle insurance cover. whether you make a claim or not, you get a discount of 25% on the insurance premium of the following policy period.
  2. Varying rate – You need to read over the motorcycle insurance policy wordings very closely before you buy the plan. This is because some insurance providers offer a varied discount, depending on how many insurance claims you make and at what point in the cover. listed below is the example of a clause that one of the leading motor insurance companies in India offer:

Timing of claim NCB
No claims during the entire policy period 35%
Within the 1st year25%
During the 2nd year20%
During the third year (in addition to more claims earlier in the plan)Nil

 You have to be very careful at the time of a claim. If you use a multiyear plan, try to avoid making small bike insurance claims. You can stand to earn a high discount when you go in for a motor insurance renewal if you make none or few claims. Additionally, you have to be mindful of the claims and subsequent NCB calculations when you renew bike insurance online. At times, insurance providers make mistakes and offer a lower discount, even though you have earned much more. Go over the figures, use a good motor insurance calculator and then pay the insurance premium for the following policy term.

In conclusion

The no-claim bonus is a very handy motor insurance component indeed. It is a reward available to you, so you must use it properly. Also, be a good rider and minimize the need to make vehicle insurance claims. You can also explore the long term bike insurance covers to ensure you get a better and more secure deal on the no claim bonus. A multiyear motor insurance policy has many benefits, the NCB clause is one of the most significant ones.

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