Bike insurance is essential to take a bike to the road. Indian laws mandate insurance cover for all two-wheelers. The policy covers damages to a bike in the case of theft, accidents or natural disaster. You can also get bike insurance online. There are three types of insurance policies for bikes—zero-depth, comprehensive and third-party. Zero-depth insurance covers the depreciation of the bike over the years. Comprehensive insurance covers damages to your bike as well as provide third-party coverage. And, third-party insurance covers only the damages caused to others in case of an accident involving your bike.
It is best to buy two-wheeler insurance online as it offers you a chance to research and compare policies provided by various insurance companies and choose the one that suits you the most.
What is no claim bonus?
Paying periodical premiums for insurance allows you to be stress-free in the face of a crisis, but that does not mean you lose out in case of no claim. You get a no claim bonus (NCB) as a cash discount on the premium if you do not claim bike insurance for the complete period of the policy. The NCB passes on to the nominee in the case of the policyholder’s death. The NCB is applicable for all claim-free years under a valid bike insurance policy. However, there is a catch with the NCB. It is valid only on comprehensive insurance and not on third-party insurance. The no-claim bonus for every claim-free year increases by 5% which could mean a lot of savings in your policy premium.
Benefits of no claim bonus
No claim bonus with itself carries a lot of benefits such as:
- Reward: The NCB can be taken as a reward for all the safe drivers. It acts as a letter of appreciation for your driving skills.
- Transfer: Your NCB is transferable. Your NCB earnings can be transferred to the new insurer if you wish to change your insurance provider. You can claim it by giving an NCB retention letter from your previous insurer and it gets transferred quite easily. However, T&C may apply.
- Premium Reduction: This comes to the action in case you buy a new vehicle and sell out your old one. You can claim your NCB and get an insurance plan at a cheaper premium.
This acts as a reward price for your skills. Encourages you to drive safely and maintain a perfect driving record. You can either get a bonus to drive safely or increase your insurance premium by driving rashly and claiming your insurance policy.
How is no claim bonus calculated?
For each year you avoid claiming bike insurance online, you get a no-claim bonus of 5%. You can claim a similar percentage of discounts on your two-wheeler insurance online or through an agent. The maximum cap on the discount is 50% which means only 50% of the discount can be availed irrespective of the number of years you did not claim your insurance. The insurance discount automatically turns to zero once you claim your policy for the damages to your vehicle. This means that for all the years that you worked for and resisted yourself from getting a claim, you have returned to square one.
The NCB of your vehicle can also be terminated in the case where the insurance policy of your vehicle remains unrenewed for more than the period of 90 days from the date of expiration of your bike insurance policy.
The NCB can help you to save some premium amount especially if you own a high-end bike. You can save some of the insurance premium money by driving safely and not claiming the insurance.