How does No-Claim Bonus work in a multi-year or long-term bike insurance policy?

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The advantages of a long-term or multi-year two wheeler insurance policy is much higher than the annual term two wheeler insurance policy. In a multi-year policy, the policyholder does not have to worry about renewing the insurance annually, the premium discount are higher, and especially the benefits of no-claim bonus are different that of an annual policy. In a long-term two wheeler insurance policy, one does not have to remember the renewal dates as a reminder would be sent to the policyholder via SMS or email much ahead of the policy expiry date. The chances of forgetting the renewal date especially in an annual term policy is higher than a long-term policy as you have to renew it once in 2 years or 3 years.

No claim bonus is a reward given to the policyholder and not the vehicle, for an efficient riding without having to claim the insurance during a policy term. This is true for both annual and long-term insurances. A no-claim bonus can be carried forward to maximum 5 years. If the insured chooses to utilise the no-claim bonus after the first term, then he/she can do so.

Below is the NCB percentage applicable for each claim free year:

In an annual term two wheeler insurance policy, once the policyholder claims the insurance for any repair or damage, the no-claim bonus becomes zero. But in a long-term policy, the percentage of no-claim bonus gets reduced after a claim but does not become zero. Only if the policyholder exceeds the limit of number of claims, the NCB becomes zero.

The no claim bonus is terminated if the policy is not renewed on time. Every insurer gives an extended 90 days’ time known as ‘grace period’ during which the policy will still be active. Post the grace period, if the policy is not renewed the NCB will also become zero. No-claim bonus can be transferred from one insurer to another if the policyholder changes to insurance provider but it cannot be transferred from one person to another even though the insured bike is the same.

If the policyholder wants to protect the no-claim bonus from getting expired or becoming nil, a no-claim bonus protection cover can be purchased as an add-on optional cover along with the comprehensive policy for extra premium.