If you’re a corporate professional with a bike, having insurance for the bike is a no brainer. One significant advantage when you opt for bike insurance is the No Claim Bonus (NCB), which rewards you for maintaining a claim-free policy term. The way NCB functions, however, varies between comprehensive and third-party insurance plans.
Knowing how it applies to each type of policy can guide you in selecting the right insurance, ensuring maximum benefits and adequate protection for your bike.
Understanding NCB in Bike Insurance
The NCB in bike insurance is a discount insurance company that provides coverage to policyholders who do not make any claims during the policy term. Insurers use this method to encourage safe riding and responsible driving.
This bonus can significantly lower your premium during policy renewal, making it a valuable reward for maintaining a claim-free record. Over time, NCB in bike insurance can reduce the cost of your premium by a substantial amount, helping you save money while keeping your bike covered.
What is NCB in Bike Insurance?
NCB in bike insurance is a reward given to bike owners for not making any claims during a policy year. It typically results in a discount on the next year’s premium. The more claim-free years you have, the higher the discount, which can range between 20% to 50%, depending on the insurer’s terms.
The NCB in bike insurance incentivises responsible riding and helps reduce the financial burden of renewing your policy.
Differences Between Comprehensive and Third-party Bike Insurance
To understand how NCB in bike insurance works differently in each type of insurance, it’s important to compare the coverage each provides. The following table outlines the key differences between Comprehensive and Third-Party bike insurance:
| Feature | Comprehensive Bike Insurance | Third-party Bike Insurance |
| Coverage Type | Covers both own damage and third-party liability | Covers third-party liability only |
| Protection for Own Bike | Yes, covers accidents, theft, fire, natural disasters, etc. | No, only covers damages caused to other people or their property |
| Legal Requirement | Not mandatory but recommended for full protection | Mandatory in most countries |
| NCB in Bike Insurance | Yes, offers NCB for claim-free years, reducing premiums | No NCB benefits or discounts |
| Premium Cost | Higher due to more extensive coverage | Lower due to limited coverage |
| Ideal For | Riders seeking complete coverage for all risks, including own damage | Riders who want basic, legal coverage with minimal costs |
NCB in Comprehensive Bike Insurance
- Eligibility: NCB is awarded for each claim-free year. If no claims are made during the policy term, the policyholder qualifies for a discount on the premium during renewal.
- Incremental Discounts: The NCB discount increases with consecutive claim-free years, providing significant savings. For example, the discount can reach up to 50% after five claim-free years.
- Higher NCB Benefits: Comprehensive bike insurance generally offers higher NCB benefits than third-party policies due to its broader coverage.
- Impact on Premiums: Maintaining a claim-free record over time can substantially lower your insurance premiums.
NCB in Third-party Bike Insurance
- Limited Scope: Third-party insurance covers only liabilities toward a third party, so the scope for NCB benefits is minimal or non-existent.
- Focus on Liability: Since third-party insurance does not cover its damage, NCB does not play a significant role in this type of policy.
Points to Consider When Choosing Between Comprehensive and Third-party Bike Insurance
When deciding between bike insurance online and offline, several factors must be considered, especially regarding NCB.
- Budget
- If you have a tight budget, third-party insurance may be more suitable, as it costs less. However, it provides limited coverage and does not offer the same NCB benefits as comprehensive bike insurance. The absence of NCB in bike insurance means you won’t enjoy premium discounts for a claim-free record.
- Comprehensive insurance is a better option if you’re looking for more extensive protection, especially for your bike. Though it will be pricier, the NCB in bike insurance can offset the cost in the long run.
- Bike Usage
- If you often use your bike in high-risk areas, comprehensive bike insurance provides better protection and maximises your NCB benefits.
- Third-party insurance might suffice if you use your bike occasionally and mainly for short distances. However, without the benefit of NCB in bike insurance, this option could result in higher long-term costs if you need to upgrade later.
- Long-term Savings
- Comprehensive bike insurance can result in higher savings in the long run, especially if you maintain a claim-free record for several years and enjoy the full NCB in bike insurance benefits. The NCB discount grows each year you remain claim-free, potentially reducing your renewal premium significantly.
- Third-party insurance may save you money upfront, but the lack of NCB in bike insurance will not help reduce future premiums.
Understanding how NCB works in comprehensive and third-party bike insurance is crucial when deciding which coverage best fits your needs. If you’re looking for more extensive coverage and the potential for future savings, comprehensive insurance and NCB in bike insurance offer valuable benefits.