All About No Claim Bonus In A Multi-Year Bike Insurance Policy

As a bike owner, skipping on a two-wheeler insurance policy can cost you big bucks. It is a compliance that is mandated by the law, the Motor Vehicles Act. But apart from legal coverage, a two-wheeler insurance policy is also useful in situations to offer your protection against damages. Hence, a two-wheeler insurance plan must not be skipped.

While buying a policy is a challenging process, it is also important to renew it periodically. Every bike insurance plan has a specific validity beyond which no coverage is available by your insurer. To keep the coverage active, timely two wheeler insurance renewal is crucial. Thus, to solve the hassle of annual renewals, you can opt for a multi-year policy.

Multi-year bike insurance policies

A multi-year policy extends the coverage of an annual plan to several years. Thus, in a multi-year policy, you need to pay a premium once for a period of two or three years depending on the policy’s terms. This is similar to subscribing to a magazine where instead of paying annually, you pay a lump sum amount at once which keeps your subscription active for a period of two / three years. In addition, the publication also offers a concession for it.

A multi-year policy works in a similar fashion where you get long-term insurance cover, safety from a hike in your premium each year and not having to renew it every year. *

No-claim bonus in multi-year plans

When it comes to comprehensive policies, a no-claim bonus is paid by the insurer by way of a markdown in your premium for every period when you do not raise an insurance claim.

While this structure of NCB goes on accumulating and increases each year for single-year policies, it is different for multi-year plans. *

For single-year policies:

Successive claim-free policy periods	Percentage of NCB
One claim-free period	20%
Two consecutive claim-free periods	25%
Three consecutive claim-free periods	35%
Four consecutive claim-free periods	45%
Five consecutive claim-free periods and onwards	50%

* Standard T&C Apply

So, even if you raise the claim in any of the periods, the NCB is reset to zero.

For a multi-year policy, the no-claim bonus can be availed even if a claim was made in the previous period. However, this condition may differ among insurance companies. For multi-year plans, the NCB is applied depending on the number of claims as the policy tenure is for three years. While some insurance companies may lock the percentage of the NCB for the entire duration of three years. So, if you have earned a 25% NCB at the start, your premium for all three years would remain at the same markdown. On the other hand, some insurance companies allow for NCB on a decreasing basis based on the number of claims. The table below represents it:

Number of claims	Percentage of NCB
0	40%
1	30%
2	20%
3 and more	0%

* Standard T&C Apply

As of 1st August 2020, the insurance regulator, the Insurance Regulatory and Development Authority of India (IRDAI) decided to do away with the long-term package policy. The insurance companies can only sell a 1-year own-damage (OD) cover with their long-term third-party plan for three years/five years. So, as a buyer, you need to confirm with your insurance company about the available policies and their bike insurance price under a multi-year plan.visit the official website of IRDAI for further details. *

* Standard T&C Apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.