Mr. Bajaj had a minor accident once. However, instead of being upset, he was surprisingly upbeat – he knew his two wheeler insurance policy would cover the repair costs. So he took his bike to the nearest cashless garage and put in a claim application. Before he knew it, his bike was repaired and the costs were almost completely handled by the insurance company. All was well until Mr. Bajaj had to renew his insurance policy. When he visited the branch of his insurance company to do so, he noticed the premium was significantly higher than usual. Let us find out why this happened to Mr. Bajaj.
NCB is a reward motor insurance companies provide their customers for riding safely. This reward is a percentage discount on your insurance premium for every year you go without making a claim. If in the first year, you go without making a claim, you’ll get a 10% discount upon renewal. Abstain from making a claim for the second year as well and you get a 15% discount upon renewal. Similarly, every year you go on without filing a claim, the quantum of discount keeps increasing until it reaches its limit of 50%.
However, the moment you make a claim, this NCB will be reset and you’ll have to pay the full premium amount on renewal. This was the reason why the premium amount was much higher than usual for Mr. Bajaj when he renewed his two wheeler insurance policy. He hadn’t made a claim against his insurance policy for the last 6 years, thereby accumulating a 50% discount on his insurance premium. However, when he made a claim, he forfeited this benefit and had to pay his full premium.
Making too many claims can result in higher motor insurance premium amounts as well. However, this depends on the nature and the frequency of the claims. If someone dashes into your car while it’s parked or while you’re stationary causing you to make a claim, the insurance company might not increase your premiums. However, a string of claims in which the fault is entirely yours could result in your premium shooting up a little.
After reading this, many start to doubt the usefulness of two wheeler insurance. However, one must note that making a claim against your motor insurance plan should be reserved for major repair costs. Making claims for every small nick and dent is not the best idea. However, if you keep your claims for larger mishaps and you’ll see just how beneficial your insurance policy is. It will make light work of the repair costs and ensure your bike is returned to you like new.
Also, when it comes to losing your NCB benefits, you can simply purchase an NCB protector with your two wheeler insurance, this will ensure you do not have to forfeit your discount upon making a claim.
Hope this has been helpful, good luck and ride safe!