NCB or No Claim Bonus is one of the most innovative features of motor insurance policies. If you own a bike and consequently, a bike insurance policy, the NCB can be beneficial in many ways. It makes you eligible for discounts when you do not raise any claims during the specified policy term. However, to ensure the continuance of the NCB, it is critical to renew the policy every year on time. But what if you have a multi-year bike insurance policy which does not require yearly renewals? How can you reap the benefits of the NCB then? We take a look at the answers to these questions and more in this article.
Firstly, Let’s Get to Know How Exactly NCB Works.
The NCB is a reward of sorts for being a good rider! If you are careful with your bike throughout the policy duration and do not raise any claims, then the insurer permits you a discount or a bonus on your next premium. This discount keeps increasing with each claim-free year until it reaches a certain limit, which is usually 50% of the sum insured.
Now, in a single-year bike insurance policy, if you were to make even one claim and break your no-claim streak, the NCB will descend to a nil amount. The workings of the NCB are different in multi-year bike insurance policies, however. In such policies, the NCB stays till the validity of the policy even when you make a claim during the long-term policy duration.
The NCB you are eligible for depends upon the number of claims you have made as well as when you have made them. Different bike insurance companies have different criteria for NCB applicability, so it is important to have a talk with your insurer regarding this before you sign up for a long-term policy. Many insurers offer the NCB on an incremental basis, that is the lesser number of claims you make, the higher percentage of discounts you are going to receive.
Some other companies may have a more complex procedure. The percentage of discount you are eligible for when you do not raise any claims at all during the entirety of the policy term will be the highest. If you make a claim in the first year but do not make any claims in the corresponding years, then the discount received will be higher than when you make a claim in the second year and none in the corresponding years.
The NCB you had retained when you purchased the multi-year bike insurance policy also makes a difference to your overall NCB calculation.
One significant benefit of the multi-year bike insurance policy is that it removes the bother of the renewal process every year. Often, people tend to forget their renewal dates and skip it involuntarily. This may lead to losing the NCB if the delay goes on for too long. With a multi-year bike insurance policy, this worry of losing the NCB goes away. Nevertheless, it is important to look out for the renewal date for the multi-year policy as well and ensure its timely continuance.
If you are planning to change insurers during the multi-year bike insurance renewal, then do keep in mind that you will need to get the NCB retention certificate from your current insurer to provide to your new insurer.
As we have seen, the benefits of the NCB get increased under a multi-year policy. If you are looking to save on premiums as well as eliminate the yearly renewal process, then a multi-year bike insurance policy is the way to go.