Riding a two-wheeler down the street with the wind blazing through your face is one of the best feelings in the world! However, this feeling can be further enhanced by opting for suitable motorbike insurance that will help you drive peacefully. But more than often, a ton of people forget to do so, even after knowing the drawbacks of riding a motorcycle without an insurance cover. And one of the major reasons for doing so is because they forget to renew their policy and let it lapse. Therefore, today in this article we will be discussing the functioning of an NCB in a long-term insurance policy.
But before that, let us understand as to why you should opt for long-term insurance:
If you are driving your motor vehicle with a lapsed policy; you are not just riding without protection but also breaking laws. The reason being; the government of India has made it mandatory for all the vehicles plying on the streets to at least opt for a minimum requirement of two-wheeler insurance. Further, in order to curb the motorbikes with a lapsed policy; IRDAI (Insurance Regulatory and Development Authority of India) has even passed a new law which states that all the new vehicle owners need to opt for a long-term third party cover. This long-term cover is 3 years for motorbikes and 5 years for cars. But this new mandate is only for the new vehicle owners and that too for a third party cover. However, the old vehicle owners and the new ones with a long-term third party cover, still have an option to either opt for a multi-year or a single-year comprehensive insurance policy.
How does NCB work in long-term two wheeler insurance?
NCB or no-claim bonus is the discount on the premium amount; awarded to you by the insurance companies for driving safe. Thus, if you drive your motorbike safely, you can not only save yourself from an accident but also reduce your premium amount. But remember that you are eligible for an NCB only if you have opted for a comprehensive policy. However, the functioning’s of NCB is different for both single-year and multi-year two wheeler insurance policies.
NCB in a single-year cover:
You accumulate NCB in a single year policy with each claim-free year. You are rewarded with a discount bonus of 20% for your first claim-free year, 25% for your 2nd, and if you still haven’t filed for a claim then you are liable for 35%in your 3rd claim-free year. Further, it is 45% for your 4th claim-free year. And the maximum NCB that you can accumulate is 50%, for your 5th year. However, all of your NCBs will dissipate into thin air; even if you make a single claim. Although, you can protect your NCB by opting for an NCB protector add-on; however, it would still cost you a higher amount of premium amount.
NCB in a multi-year policy:
On the other hand, NCB in a long-term two wheeler insurance work a bit differently; your rewards are higher than you short term cover. Further, you don’t even lose out on your NCBs if you file for a claim—the reason being; you receive up to 40% NCB at the start of your policy tenure. However, your NCB (no-claim bonus) discount reduces with each claim that you make. If you have filed for one claim during your policy tenure then you are eligible for a 30% discount; whereas, if you have made two claims then you will receive 20% NCB. But you will miss out on all of your NCB if you have filed for three claims. However, it is important to remember that all car insurance providers have a different take on NCB discounts of long-term policies. Therefore, it is important that you speak to your insurance agent to get a proper understanding before you sign on the dotted lines.
Hence, NCBs in long-term policy work in your favor as opposed to the functioning of NCB in a short-term cover.