Since time immemorial, good behavior has always attracted a reward, like a scenario where you visit a new place with your dad. You do not destroy anything that might cost him extra dollars to fix, always attracts a perk like candy or even a few bucks for yourself. This situation also applies when it comes to motorbike insurance. If you take care of your bike, drive safely, and ensure that you do not get involved in an accident, you do not need to claim insurance since there is no damage to your motorbike; therefore, there is no necessity for an insurance claim.
Now, if you do not claim insurance for a year for careful driving or, in this case, conservative riding, you get a discount on your premiums. This discount is known as a claim bonus. Well, people are known to make unnecessary and rogue insurance claims. Therefore the no claim bonus perk was introduced to instill some discipline to motorbike owners and urge them to take proper care of their motorbikes. Though officially, the no claim bonus is defined as a kickback which an insurance awards to an insurance holder for not claiming insurance in a whole year of the insurance agreement. An insurance company usually adds it to your insurance policy. This bonus is, however, only available on the renewal of an insurance policy.
Now well, if you keep renewing your policy and not even make a single insurance claim over the years due to good bike management, your no claim bonus accumulates.
What happens if you buy a new bike and your claim bonus is high? Can it be transferred? The answer to that is yes. But, to avoid losing your No claim bonus for a particular year, you need to move your no-claim bonus after the 12-month tenure is over, not before. This timing is necessary because your insurer always offers you the no claim bonus at renewal at the end of your policy.
What happens if you want to switch your insurer with another one? Will I lose my bonus?
The answer to that is a no. Since your no claim bonus might have accumulated over the years and losing it might be a big blow-up to the financial situation, the transferrable of a no claim bonus is allowed between different insurers. But to do this, you’ll need your proof of no claim bonus from your previous insurer, which is also known as an NCB certificate. Your renewal policy usually accompanies this proof, but you can always contact your previous insurer if you fail to get it.
Let’s get started on how your insurance company calculates your no-claim bonus. Your no claim bonus usually becomes activated after the first renewal policy of your comprehensive bike insurance. It is also important to note that this bonus is solely applicable to the own damage component of your insurance premium. It does not apply to a third-party cover.
After the end of the first year, you begin by getting a 20% discount on your insurance plan. Remember that the year has to be insurance claim-free. The no-claim bonus increases by 5-10% at your policy renewal time of the year. In layman’s language, the discount is accumulated on your policy each year that passes by without you claiming insurance.
This discount accrues up to 5 years of insurance claim-free policy. The no-claim bonus does not increase afterwards, even if you do not make claims over the next couple of years. If you decide to transfer your discount to a new two-wheeler and your discount is 50%, you only need to pay half of your damage premium.
You can lose your no claim bonus if you claim your insurance irrespective of whichever year of your policy it is. But the addition of an NCB protection feature in your policy prevents the rule from applying.
This NCB protection feature, however, depends on if your insurance company provides the perk or not. This feature allows you to make a specific number of claims in a year without losing you no claim bonus (mainly one). Some insurance companies tend to add a requirement for you to have gone several years without claiming before the protection feature is activated.
Can you transfer your no-claim bonus to another person?
The answer to that is no. The NCB policy is only applicable to the policyholder, and therefore, the insurer cannot transfer it. The exception to sharing your no claim bonus is in the event of your death. Therefore your insurer can transfer it to your nominee. You could also lose your no claim bonus if you get involved in an accident, even if it wasn’t your fault, get hit by an insured driver, or lose your motorbike. These situations make your premiums go up on renewal.
Remember to take care of your motorbike if you happen to go on a bike racing spree.
