According to the Insurance Regulatory and Development Authority of India (IRDAI), the No Claim Bonus (NCB) is tied to the policyholder, not the vehicle. This means if you are buying a new bike, you can carry forward your existing NCB to the insurance policy for the new vehicle.
How do I transfer an NCB in bike insurance? Keep reading to find out!
How to Transfer NCB When Buying a New Bike Insurance Policy?
To transfer your No Claim Bonus when purchasing a new bike insurance policy, you need to follow the steps mentioned below:
Step 1: Gather Necessary Documents
Collect proof of your No Claim Bonus (NCB) from your current insurer. This can be:
- Renewal notice from your current insurer.
- Letter confirming NCB eligibility.
- Expired insurance policy with verification of no claims.
Step 2: Transfer NCB
Provide your previous insurance policy number, NCB percentage, and the name of your previous insurance provider to your new insurer. The new insurance provider will handle the rest of the transfer process on your behalf.
If you are buying your policy offline or through an agent, you will need to:
- Submit the buyer-seller agreement (Forms 29 and 30).
- Write a request letter to your previous insurer asking for the NCB transfer.
Step 3: Request NCB Certificate from Old Insurer
After your request is processed, your old insurer will issue an NCB certificate.
Step 4: Submit NCB Certificate to New Insurer
Submit the NCB certificate to your new bike insurance company to complete the transfer and enjoy the discount on your premium.
What are the Documents Needed for NCB Transfer in Bike Insurance?
To transfer your No Claim Bonus in bike insurance, ensure you have the following documents ready:
- Delivery note copy for the sale of your old bike
- Insurance policy copy of the old bike
- Booking form copy for your new bike purchase
- NCB transfer application form
- Buyer-seller agreement (Forms 29 and 30)
- Copy of the transferred RC for the old bike (if sold)
- NCB certificate from your previous insurer
Key Points When Transferring No Claim Bonus in Bike Insurance
Here are some essential points you need to remember when transferring an NCB:
- The No Claim Bonus is associated with the policyholder rather than the vehicle. You can transfer your NCB when you buy a new bike or switch insurers.
- NCB in bike insurance is only applicable if no claims were made during the previous policy period.
- To retain the benefit, you must complete the transfer within 90 days from the date of policy renewal.
- Double-check the NCB percentage you are eligible for and provide accurate details to the new insurer.
- NCB is applicable only to comprehensive bike insurance policies, not third-party liability plans.
What are the Advantages of No Claim Bonus in Bike Insurance?
NCB is an additional bonus bike insurance companies provide to their policyholders. It acts like a reward for not having an incident that necessitates a claim during the policy period. Below are some of the key advantages of NCB:
NCB enables policyholders to get insurance plans at a more affordable cost than their previous policies. These savings can be used for bike-related expenses or other financial opportunities.
If the insured policyholder does not file a claim during the policy period, they are given a discount of their choice. The discount rate increases progressively depending on the number of years without claims.
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Hassle-Free Renewal Process
The NCB proves advantageous when renewing your bike insurance. You may find yourself having to fill in fewer forms and get quick approval.
How Does NCB Impact Your Premium Calculation?
The No Claim Bonus can significantly reduce your two-wheeler insurance premium. Nevertheless, you must remember that after five years, the NCB discount reaches its maximum limit and will stay the same, even if you avoid filing a claim during subsequent years. Let us see how NCB can affect your premium calculation with an example.
Imagine you bought a high-performance motorcycle in 2019. You have been a responsible rider who pays the insurance premiums on time and never raised a claim in the first five years. In 2024, you decide to upgrade to a newer, more advanced model and purchase a new bike with fresh insurance coverage.
Let us say the premium amount for your new bike amounts to ₹3, 500. With the accumulated NCB for five years, you are eligible for a 50% discount on your premium. This means you would only need to pay ₹1, 750 for your new bike's comprehensive bike insurance premium. To calculate this easily, you can use a two-wheeler insurance premium calculator to see how NCB affects your premium.
Transferring your NCB in bike insurance when buying a new policy is a straightforward process, whether online or offline. By ensuring you have the necessary documents and following the steps outlined, you can benefit from reduced premiums and greater savings. However, always verify the details with your new insurer to ensure a smooth transfer.