What is NCB and why is it important for your Two-Wheeler Insurance?

03 June 2019

Motor Insurance is a must both from the view point of law in terms of third-party Coverage and to protect against Own Damage losses to the vehicle. One cannot simply overlook the importance of two wheeler insurance at any point in time. So, while we consider insurance to be indispensable, we need to keenly look into the finer aspects too, one of which is NCB. Many people vaguely know that a term called NCB exists, but it is crucial to understand its importance at the time of renewal of your two-wheeler insurance, to prevent future disappointment and confusion, should you raise a claim.

NCB, which stands for No Claim Bonus, is the bonus you earn for every claimless year of your insurance. In other words, it is the benefit given by the insurance provider for safe driving and maintenance of your vehicle. At the time of renewal of your two-wheeler insurance, the higher the NCB, the lower will be your insurance premium. You can earn up to 50 percent discount in the 5th consecutive claim-free renewal of the vehicle, should you choose to continue till that point in time. This is why it is always advised not to claim insurance for minor damages and repairs of your two-wheeler. A little restraint in this matter goes a long way. Because while it is tempting to tap into your insurance whenever damage occurs, it is better to think twice as the NCB will revert to zero for any claim made, and you stand to lose when the time for renewal of your two-wheeler insurance comes.

Usually, NCB is steadily increased by the over the years as per the fixed Table mentioned in India Motor Tariff, as a reward for you not raising a claim in the previous years.

When is NCB discontinued/not available?

• In the case, you do not renew your insurance policy for than 90 days after the expiry.
• In the case of a claim has intimated, NCB will not be offered in the following year.
• NCB is applicable only on the own damage component of the premium and not on the third party insurance premium. This means that if you have only third-party insurance and not own damage insurance component in your policy, you cannot avail NCB.

More facts about NCB

• It is transferrable from one insurance provider to another. When you switch insurance providers at the time of renewal of Policy, the next insurer will also provide the next slab of NCB subject to terms and conditions.
• It is transferrable from one vehicle to another, under the same policyholder’s name. This means that if you sell your old car and buy a new one, you can transfer the NCB accumulated on the old vehicle to the new one, without losing out on your claim-free performance over the previous years. This facility is possible because the NCB is always offered to the policyholder and not the vehicle.

So, it is clear that
NCB is a critical factor to look out for, not only at the time of insurance renewal but also during its currency. Do not forget to claim it during the two-wheeler insurance renewal and to transfer it when you buy a new one. If you are a new Liberty General Insurance user, click here to avail our two wheeler insurance policies. If you’re looking to renew your policy, click here.