Know About Two Wheeler Insurance No Claim Bonus
9 Feb 2018
All You Need to Know About No Claim Bonus
No Claim Bonus (NCB) is an effective strategy to bring down premium costs. The discounts on the premiums may vary from 20% for the first year to 50% in the fifth year. This helps you to cut down spending on premiums. However, it is important to understand the specifics of No Claim Bonus to avoid disappointments upon policy renewal.
When you buy a two-wheeler insurance policy, a certain amount is set aside as a premium which needs to be paid for the policy to remain effective. If, after a year, you have not made claims on your bike insurance, you become eligible for a No Claim Bonus.
1. How to build a No Claim Bonus?
For every insured year without claims, you earn another year’s benefits on discounts. For example, if your two-wheeler is damaged due to an unfortunate incident, it’s prudent to incur small expenses and maintain a claim-free record rather than file a claim. You can save more in the form of discount benefits when you renew your bike insurance a year later.
2. No Claim Bonus is transferable
No Claim Bonus belongs to the policy holder and not to the vehicle. The No Claim Bonus feature allows you to carry forward the benefits on your new bike. Also, if you wish to purchase a new two-wheeler insurance policy, you can avail the discounts by transferring the No Claim Bonus to your new policy. However, the option of person to person transfer is not available, except to the legal heir of the policy holder in case upon the policy holder’s death.
3. How does filing a claim affect No Claim Bonus?
If you make a claim and your insurers pay the amount, you will generally lose some or all of your no claim bonus. For example, if your bike is hit by another vehicle and the fault cannot be determined, insurers may split the cost of claims and both drivers’ No Claim Bonus could be affected. However, if it’s agreed that it wasn’t your fault, your insurer can claim the pay out from the other party. Thus, your No Claim Bonus remains unaffected.
The advantage of protected No Claim Bonus
In case your bike meets an accident, you risk losing your No Claim Bonus by filing a claim. Well, not if you opt for an add-on cover. Add-on covers allow you to reserve a certain amount to cover accident expenses without affecting the bonus. Moreover, even if your insurer is unable to recover the cost, your No Claim Bonus remains intact. However, the number of claims allowed in such scenarios varies from every insurance company.
To effectively use the benefits of No Claim Bonus, it is advisable to bear the cost of repair in case of minor issues. If you are filing a claim for minor issues, it will only affect your chances of acquiring a no claim bonus and shoot up your premiums substantially.