Know How You Can Save More During Bike Insurance Policy Renewal

A bike is a dear investment for many, be it a bike enthusiast or one who seeks ultimate utility in their bike. For such precious purchase, protecting it crucial. If you invest a significant amount in buying it, you definitely want to ensure its safety and what better than a bike insurance policy? Bike insurance plans are the ultimate way to ensure protection for your bike. Not just that, they also help comply the law, the Motor Vehicles Act, which requires all vehicles registered in the country to have a valid insurance cover. Thus, with dual benefits legal compliance and a financial cushion, a bike insurance plan is hard-to-miss investment. For all cost-conscious buyers, price is a concern. If you are one of them or even simply conservative of how you spend your money, how does the idea of a bonus to lower your premium sound? Too good to be true, right? But, bike insurance plans offer no-claim bonus as a reward that can be earned if you know how to go about it. This article elaborates on how a no-claim bonus can help you save at your bike insurance renewal.

What is a no-claim bonus?

No-claim bonus or NCB is the reward that the insurance company pays for not making any claims during the policy tenure. It is a form of saving in your premium helping you limit the amount to be paid at your next insurance renewal. However, to claim such concession, you need to ensure no-claims are raised during the policy tenure. There is no threshold of the amount of claim, but even a single incidence of claim is enough to take away any benefits that are associated with the no-claim bonus. While it lowers the premium amount, you need to remember that the no-claim bonus is only computed on the own-damage premium. Hence, third-party policyholders do not enjoy the benefit of such NCB since there is no coverage for the policyholder’s bike.

How does the no-claim bonus work?

The NCB benefits, as discussed above, are computed based on the own-damage premium in a comprehensive policy or on the premium for a standalone own-damage cover. The benefits of such NCB start at 20% and go all the way up to 50%. They increase with each consecutive claim-free policy years. If any claim is made during this tenure, it gets reset and you are required to pay the full amount of premium. Thus, such NCB can be accumulated to save premium at renewal. The following table explains how it increases with each consecutive year:  

Policy tenure	Percentage of NCB
1 claim-free policy tenure	20%
2 consecutive claim-free policy tenures	25%
3 consecutive claim-free policy tenures	35%
4 consecutive claim-free policy tenures	45%
5 consecutive claim-free policy tenures	50%

  Also, such NCB can be transferred among insurance companies thereby enabling you to switch your insurance company freely. All you need to do is obtain an NCB transfer certificate. Further, such NCB is attached to the policyholder, i.e., you. Hence, even if you sell your bike, you can still carry such NCB benefits for the insurance purchase of your new bike. Such accumulated NCB remains valid for a period of three years after the sale of your bike. *Standard T&C Apply Please visit the official website of IRDAI for further details.

Final thoughts

NCB is smart way to lower your insurance premium during renewal. Avoiding claims for minor repair costs can help to accumulate the NCB that offers a substantial mark-down on the own-damage premium which is the majority portion when it comes to a comprehensive policy. Thus, make sure to combine together the future benefits offered by such NCB and the deductible required to pay at the time of repairs to estimate whether a claim must be made or not. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.