We have heard of warranties and discounts, right?. Buying membership cards to fetch discounts is the most common type of marketing and relationship we see. It says that if you continue shopping and collect some valuable points, you can get a discount. This is about making a strong bond with better services and waivers. So, when there are many insurers in the market, they want their customers to be happy and satisfied. Hence, under a Two Wheeler Insurance policy, insurance companies offer you some bonus if you have a claim-free year.
What is No Claim Bonus?
For one claim-free year, the insurance company offers you a bonus on the Own Damage Premium. This benefit can be availed for the next renewal of your bike. You may earn a discount of 20% on the premium which will go high up to 50%.
Why is No Claim Bonus important?
A No Claim Bonus is important because you earn a discount for not claiming throughout the year. It becomes a benefit for policyholders like you. Do not miss on insurance policy renewal as if it happens then you will be able to earn the No Claim Bonus only if the policy is renewed within 90 days of the expiry date of the policy.
How to calculate No Claim Bonus?
Imagine you and Ashish (your friend) purchased bikes in the year 2018. You were quite a stable driver and always maintained speed. Ashish, on the other hand, did not follow the traffic rules and suffered an accident. It was reported to the insurance company and the claim was approved. For the renewal due this November, you will be able to earn a No Claim Bonus of 20% for the 1st year. Whereas, Ashish could not earn the bonus because of the claim.
At the time of renewal, the No Claim Bonus you can get will be like
| Claim Free Years | % of No Claim Bonus earned on Own Damage Premium |
| One Claim Free Year | 20% |
| Two Consecutive Claim Free Year | 25% |
| Three Consecutive Claim Free Year | 35% |
| Four Consecutive Claim Free Year | 45% |
| Five Consecutive Claim Free Year | 50% |
Let us see how will the premium be calculated for your bike whose value for renewal is Rs.65,000/-.
| MOTOR TWO WHEELER | |
| IDV | 65000 |
| R 1.341% | 872 |
| NCB 20% (for first renewal) | -174 |
| 698 | |
| ACT | 750 |
| CPA | 295 |
| NET PREMIUM | 1743 |
| GST 18% | 314 |
| GROSS PREMIUM | 2057 |
| ZERO DEPRECIATION 35% | 305 |
| GST 18% | 55 |
| TOTAL | 2417 |
Advantages of No Claim Bonus
As soon as you suffer a collision or any damage, you tend to ask your insurance company to settle the repair damages for it. But before you do so, you should evaluate or ask the surveyor for the estimated amount of loss. If the amount of loss is less or is not even admissible due to compulsory deductible, it is not wise to file for the claim. In case you file claims repeatedly, chances are your credibility will reduce. Hence, drive safely and choose to avoid claims to get the No Claim Bonus.
Here are the advantages of a No Claim Bonus which you may procure at the time of renewal:
You should know that NCB cannot be shared between two vehicles you own. Nowadays, you can also buy NCB protection as an add-on cover under your Bike Insurance Policy. It will help you to protect your NCB earned even when you file a claim.