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How is NCB Calculated for Bike Insurance?

All two-wheeler owners must have insured their vehicles as per the prevailing law. We hope you are no exception!
A two-wheeler insurance policy protects the insured vehicle against unfortunate events that may lead to huge monetary drain. You can avail the policy benefits, in exchange for an annual premium, where the insurer promises to come to your rescue, in case of an accident or other related damages.

Given that, the policy premium is one of the main aspects to be considered while buying a policy. When there are various factors playing an important role in deciding your two-wheeler insurance premium, No Claim Bonus plays it parts ardently to lower the premium burden. Let’s consider how does a knight in shining armour work in regard to lowering your premium!

Why is NCB Important?

No Claim Bonus encourages safe driving. It is a trick of insurers to motivate the drivers to ride or drive safe on the roads. Safe driving leads to no claim. In return, insurance companies pay a reward called NCB bonus, which can be redeemed by paying a lower premium at the time of bike insurance renewal. Or you can increase the policy sum insured if you feel the existing SI insufficient.

Amazing Perks of NCB

As of now, you know that NCB is a reward from the insurer for not claiming your two-wheeler insurance. It hosts certain perks:

  • Works as a Reward: It is a token of appreciation that you receive from the insurance provider. The zeal for earning NCB every year eventually develops your riding skills and makes you a skilled driver.
  • Easy to Transfer: Remember it-NCB always belongs to you, not the vehicle. So, even if you switch to a new insurer, it goes along with you. That means, if you’ve earned an NCB, let’s say 45%, from your existing insurer, it is easily transferable to the new insurer, at the time of renewal. However, the terms and conditions are to be followed
  • Reduces the Premium: If you are planning to sell out the old bike and buy a new one, the acquired NCB will help you get a bike insurance plan at a reduced rate.

How does No Claim Bonus Function?

No Claim Bonus is operation in case of a claim-free year. This discount is only applicable on Own Damage cover and not meant for the Third Party Liability insurance. The rate of NCB increases by 5% every year for every claim-free attempt you made. Let’s understand this with an illustration:

Let’s imagine you own bike insurance with an IDV of Rs. 1 Lakh, where the premium you pay is Rs. 15,000 PA. If you have not initiated a claim in the first year, the NCB to be earned at the time of renewal is 20% on the annual premium. If this implies on your consecutive year premium, you actually pay Rs. 12,000, not Rs. 15,000, taking into account the 20% NCB bonus on premium.

How is NCB Calculated for Bike Insurance?

A maximum of 50% discount on the premium to be availed in case you don’t make a claim. The NCB comes with a comprehensive cover which reduces the premium by allowing the insured to apply these bonuses.

But here is the catch...

Your NCB turns to ZERO even a single claim is made, irrespective of for how many years you’ve restrained yourself from claiming the insurance. Let’s assume:

A and B both buy the same bike model Bajaj Avenger Street 160. They both have bought the same comprehensive cover to protect their prized possession. When A doesn’t make a claim in the first policy year, B makes a claim. In this case, A is eligible for NCB benefit of 20% where B is not. In case they both pay the premium of Rs. 12,000 individually, here’s how the applied NCB will work for both:


Payable premium



First year premium

Rs. 12000

Rs. 12000

Second year premium

Rs. 10,000

Rs, 1000

After applying NCB of20%

Rs. 8,000

As B is not eligible for any discount, the total premium to be paid is Rs. 10,000

When is NCB Terminated?

NCB turns to be ZERO when either of these situations occurs:

  • If a claim has been made by you during the policy year, your acquired NCB will be terminated and you’ll not be eligible for availing a discount o next year policy premium.
  • In case you have not renewed the policy within 90 days from the actual date of policy expiration

How Does NCB Impact on Your Premium Calculation?

The NCB is rewarded by the insurance providers with an increasing discount for every claim-free year. Here’s how the actual NCB slab for different claim-free years. The below table simplifies how NCB works and how helpful it is:


NCB Discount

For first claim-free year


2nd claim-free year (continuous)


3rd claim-free year (continuous)


4th claim-free year (continuous)


5th claim-free year (continuous)


A Little Advice can Go Long Way!

While deciding on NCB, you should consider a few things:

  • Never fail to renew your policy on time. The NCB gained will be dissolved once you miss renewing the policy within 90 days from the date of its expiry. No NCB means no more discount on the premium.
  • You can’t share the discounts earned between two different policies. It can be used only one policy at a time.
  • In case you cancel your two-wheeler policy before the completion of its tenure, the NCB earned for a particular year could go waste.
  • An NCB retention letter has to be submitted to the insurer in case you want to transfer your NCB from the old two-wheeler to a new two-wheeler policy.

Over to You!

So, if your motive is to save on the premiums, then it is recommended to drive safely and restrain yourself from claiming your two-wheeler insurance policy. This way you can make the most of your NCB benefit and enjoy an affordable yet extensive policy coverage.