Reduce Your Bike Insurance Premium By Avoiding Small Claims! Read How?
Updated On Jul 26, 2021
Read this article to understand how avoiding small claims will reduce the cost of your bike insurance premium.
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Insurance is purchased to help you avoid repair costs that come up when your bike has been damaged. Despite bike insurance being made to help you to overcome financial liabilities, experts advise you to avoid claiming insurance for small amounts. This article will help you to understand the logic behind that advice.
Benefits of Having A Bike Insurance Policy
Purchasing a comprehensive bike insurance plan benefits the policyholder with many perks. This includes cover for the cost of repairing damages due to an accident, natural disaster, or man-made calamity. The insurance even covers for theft of the insured two-wheeler. The policy allows you to pick suitable add-ons based on your requirements that help you to save yourself from the unwanted expenditure.
These beneficial features can pave way for assuming that it is advantageous to bike insurance claim for all kinds of damages irrespective of their extent. However, there is another side to the theory.
What is No Claim Bonus in Bike Insurance?
Bike insurance companies offer discounts on insurance premiums by various means. One of them is the No Claim Bonus. NCB is considered to be the biggest discount on your bike insurance premium. This discount is cumulative in nature which means that it increases with each claim-free policy year. The following is the generic details on the percentage of discount on each claim-free policy year-
- One full policy year without claiming an insurance amount will benefit the policyholder with a 20% bonus.
- Two full policy years without claiming an insurance amount will benefit the policyholder with a 25% bonus.
- Three consecutive claim-free years will provide the policyholder with a 35% bonus.
- Four policy years without claiming insurance will grant the policyholder a 45% discount on the premium.
- Five consecutive claim-free policy years will provide the person with a 50% discount on the premium.
You may also like to read:- How to make a car insurance claim in case of theft?
How Do No Claim Bonuses Work?
No claim bonuses are technically the discount that the policyholder receives on their premium cost if they don’t claim their insurance for a complete policy year. The discount percentage increases in a cumulative manner thus increasing the discount per policy year.
As soon as the claim is raised, the discount drops down to zero and the NCB cycle will reset. Avoiding to claim insurance for minor damages like scratches and dents will help you achieve a decent discount on your premium through the NCB.
Insurance premiums also have a tendency to increase from time to time. At the time of renewal of your policy, you will come to realize that the increased cost of your policy has caused more financial loss than the repair cost for minor damages. For example, if your bike has been exposed to dents and scratches for 5 years then it will make sense to claim the insurance as the repair amount will be high. On the other hand, if you claim your bike insurance for minor scratches to your bike, your NCB percentage will drop down to 0 and there will be no discounts on your premium. Therefore, it is wise to avoid claiming your bike insurance for minor damages and claim insurance only for major damages, repair costs, theft, or third-party incidents.
No claim bonuses also do not affect the premium of third-party bike insurance. This is mainly because third-party insurance covers the damage of the third-party vehicles and owner and does nothing to cover the damage of the policyholder’s bike.
Insurance premiums are an important factor while purchasing bike insurance policies. Having a bike insurance policy that provides complete coverage with an affordable premium amount is something that everyone desires. NCB is one of the best ways to achieve that arrangement. So make sure to avoid claiming insurance for minor damages and ride safe!
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.