Check no claim bonus before renewing bike insurance: up to 50% off own damage premium

When you renew your bike insurance, the premium may not be the same as last year. One reason could be your claim-free record. If the conditions are met, the no claim bonus (NCB) gives a discount on the own damage premium. Knowing how NCB is calculated, where the discount applies and what happens to it when you change your bike or insurer makes the renewal premium easier to understand.

NCB is a discount earned on a claim-free insurance record. The longer the run of years without a claim, the higher the discount, up to a maximum of 50%. On the premium of an own damage (OD) policy, the discount is 20% for one claim-free year, 25% for two consecutive years, 35% for three, 45% for four and 50% for five.

Take an example. If your OD premium is Rs 5,000 and your NCB works out to 35%, the discount will be Rs 1,750. This NCB does not apply to the third-party premium.

The amount of the discount depends on the premium charged for the OD cover. This means that even with the same NCB percentage, two policyholders can get different discounts if their OD premiums differ. For instance, 35% NCB on an OD premium of Rs 3,000 gives a discount of Rs 1,050, while the same NCB on an OD premium of Rs 6,000 gives Rs 2,100. The percentage stays the same, but the discount in rupees changes with the OD premium.

NCB is linked to the policyholder, not the vehicle. If you sell your bike and buy another, the accumulated NCB can be used on the new vehicle, subject to the applicable conditions. Documents proving your entitlement to NCB may be needed, such as the renewal notice or a confirmation from the previous insurer.

Changing the insurer at renewal does not wipe out the NCB you have earned. Subject to the applicable conditions, you can carry the eligible NCB to the new policy. You may have to give proof of the bonus when taking the new policy. When switching companies, keep these documents ready: your current policy document, the renewal notice showing the NCB, and, if asked, an NCB certificate or other proof. Checking these before renewal helps ensure your accumulated NCB is counted even if you move to a new company.

NCB depends on keeping a claim-free record. If a claim is made, the NCB can be lost for the next policy period under the applicable motor insurance rules. So pay attention to your NCB history when going through the renewal papers. Always check the actual rules against the wording of the policy rather than going by guesswork.

Overall, before renewing two-wheeler insurance, do not look only at the total premium. Check the NCB percentage shown in the renewal papers and see whether it matches your eligible claim-free record. NCB is only one part of the premium, but understanding it makes the discount you are getting clear. If anything looks different from past records, check the policy papers or speak to the insurer before completing the renewal.