Ever wondered how No-Claim Bonus works in Multiyear Two Wheeler Insurance? Find out how it’s different and better than NCB earned in single year policies.
Love riding your bike, don’t you? But are you among those who find it hard to remember renewal dates or keep dilly-dallying the renewal of your insurance policy?
We understand it’s just once a year that you need to renew.
But, then when you have your busy schedules, work load, family conflicts, relationships, friends, and other bigger responsibilities, remembering something such as your two wheeler insurance renewal date does not really sit at the top of your mind.
Well, that won’t be the case anymore with multi year two wheeler insurance.
Multiyear two wheeler insurance – Why do I need it?
Here, you pay a lump sum premium just once at the start for three full years and get your bike insured for the entire policy tenure i.e three years.
Confused? Don’t have to be!
So, the concept is similar to a magazine subscription. Instead of subscribing annually, you perhaps pay a subscription of three years and enjoy reading your magazine for the next three years in peace. The bonus here is that you also receive a discount on subscription fees.
Multiyear two wheeler insurance works the same way.
In fact, here you get:
- Long-Term Coverage
- Safety from Annual Hikes in Premium
- Stress-free insurance
To learn more details about the benefits of multiyear two wheeler insurance, check out this article on Reasons for buying multi year two wheeler insurance.
The structuring of No-Claim Bonus – How does it work?
As you know, No-Claim Bonus is discount on premium that insurance companies offer you if you haven’t made a claim on your two wheeler insurance policy during the term of the policy.
The structure of NCB slabs in case of renewal of a multiyear two wheeler insurance policy is different as compared to a single year policy.
For single-year policies:
| NCB structure for one-year policies | NCB Earned |
|---|---|
| At the end of 1 claim free year | 20% |
| At the end of 2 consecutive claim free years | 25% |
| At the end of 3 consecutive claim free years | 35% |
| At the end of 4 consecutive claim free years | 45% |
| At the end of 5 consecutive claim free years | 50% |
Even if you raise a single claim in any of the years, your NCB drops down to 0%
When it comes to multiyear two wheeler insurance:
Unlike single year policies, in multiyear two wheeler insurance policies, the No-Claim Bonus can be availed even if claim was made in the previous policy period. However, this would vary from one insurer to another.
The structure of NCB is different here as the policy tenure is of three years. The NCB % can be applied on the premium at the time of renewal depending on the number of claim/claims made or not made at all.
Some insurers lock the No-Claim Bonus period for the entire policy period that is three years. This means you that supposing you are eligible to earn a NCB of 25% discount, you get it for all the three years.
On the contrary there are certain insurers who offer you NCB on an incremental basis. Let's go step-by-step:
When renewing a three-year policy,
- If no claims are made during the entire policy term of three years, then you can get 30–35% discount ( varies from insurer to insurer)
- If you make a claim in the first year of the policy (0 – 12 months), but haven’t made claims in 12- 24 months, then you get 25% NCB discount
- If you make a claim in the second year of the policy (12 – 24 months), but haven’t made claims in 24 – 36 months, then you get 20% NCB discount.
- If you make a claim in the third year of the policy (24 – 36 months) or if you have made more than one claim during the three year tenure, then you get 0% NCB discount.
Let’s take another example of NCB % entitled at the time of policy expiry of some insurance companies.
For multiyear two wheeler insurance policy of three years
| NCB% at the time of inception | No claim made for full policy tenure of three years | One claim during the policy period | Two Claims during the policy period | Three claims during the policy period |
|---|---|---|---|---|
| 0 | 45 | 35 | 25 | 0 |
| 20 | 50 | 45 | 35 | 25 |
| 25 | 50 | 45 | 35 | 25 |
| 35 | 50 | 45 | 35 | 25 |
| 45 | 50 | 45 | 35 | 25 |
| 50 | 50 | 45 | 35 | 25 |
*Note: For more than 3 claims made during the policy period you get an NCB of 0%.
The NCB structure as per few other insurance companies,
| Total number of claims | Incremental NCB % |
|---|---|
| 0 | 40 |
| 1 | 30 |
| 2 | 20 |
| 3 and more than 3 | 0 |
NOTE: Every insurance company has its own different NCB structure that is subject to change as far as long-term or multiyear two wheeler insurance is concerned. So, you need to speak to your insurance broker or directly to the insurance company and go through the terms and conditions of the policy document before buying a multiyear two wheeler insurance plan.
Ultimately, you enjoy higher NCB discounts
With the multiyear two wheeler insurance, regardless of whether you make a single claim or not, you are eligible to receive NCB discount at the time of renewal. The plus part here is that you comparatively receive a higher NCB % as compared to single-year policies.
