Mastering IDV and NCB in Two-Wheeler Insurance




Two-wheeler insurance becomes more manageable with a grasp of two essential concepts: Insured Declared Value (IDV) and No Claim Bonus (NCB). IDV determines your vehicle’s insured amount, while NCB rewards you for claim-free years. This guide provides a concise exploration of IDV and NCB, empowering you to navigate the intricacies of two-wheeler insurance policy confidently. Unlock the potential for optimal coverage and a secure ride through a clear understanding of these vital elements.

What is the Insured Declared Value?

Insured Declared Value (IDV) is the maximum sum assured that an insurance company will provide to the policyholder in case of total loss or theft of their insured two-wheeler. It represents the current market value of the vehicle at the time of policy renewal. IDV is calculated based on the manufacturer’s listed selling price, adjusted for depreciation as per the vehicle’s age. A higher IDV implies a higher insurance premium, while a lower IDV may lead to inadequate coverage during a claim. It plays a crucial role in determining the compensation amount during unfortunate events, encouraging policyholders to set it accurately to ensure sufficient coverage and avoid potential financial loss. Regularly updating the IDV helps maintain the right balance between coverage and premium cost.

What Should Be the IDV of Two-Wheeler Insurance?

The Insured Declared Value (IDV) of two-wheeler insurance should ideally be the current market value of the vehicle at the time of policy renewal. It is calculated based on the manufacturer’s listed selling price and adjusted for depreciation according to the age of the two-wheeler.

Selecting the appropriate IDV is crucial, as it directly affects the insurance premium and the compensation amount during claims. Setting a higher IDV will result in a higher premium, while a lower IDV may lead to insufficient coverage during accidents or theft. Striking the right balance is essential to ensure adequate coverage without overpaying for insurance.

To make an informed decision, consider factors such as the current market value of the two-wheeler, its age, condition, and any additional accessories. Regularly reviewing and adjusting the IDV ensures that the policy provides the right level of protection and financial support in case of unfortunate events.

What is No Claim Bonus (NCB)?

No Claim Bonus (NCB) is a reward given to policyholders by insurance companies for not making any claims during the policy period. It is a form of discount on the insurance premium and acts as an incentive for safe and responsible driving.

For each claim-free year, the policyholder earns an NCB, which accumulates annually, leading to increased discounts on the premium at the time of policy renewal. The NCB percentage typically ranges from 20% to 50% and can significantly reduce the cost of insurance over time.

If the policyholder makes a claim during the policy period, they lose the NCB for that year. However, a few insurers offer NCB retention add-ons, enabling policyholders to retain their NCB even after making a claim, but it comes with an additional premium cost.

NCB is usually applicable to comprehensive motor insurance policies and can be transferred to a new vehicle or a new insurer when switching policies, encouraging policyholders to maintain a claim-free record and enjoy the benefits of reduced premiums.

Can NCB Be Transferred to Another Vehicle?

Yes, the No Claim Bonus (NCB) can be transferred to another vehicle. If a policyholder sells their existing vehicle and purchases a new one, they can transfer the accumulated NCB to the new vehicle when buying insurance for it.

To transfer the NCB, the policyholder needs to follow these steps:

  1. Inform the Current Insurer: Notify the current insurance company about the sale of the old vehicle and request an NCB certificate. This certificate will state the percentage of NCB earned during the claim-free years.
  2. Purchase Insurance for the New Vehicle: When buying insurance for the new vehicle, provide the NCB certificate to the new insurance company. The NCB will be applied as a discount on the premium for the new policy.
  3. NCB Validity Period: The NCB certificate is usually valid for a certain period (typically 90 days) from the date of sale of the old vehicle. The policyholder must use it within this period to avail of the NCB benefit.
  4. NCB Portability: NCB is transferable even when switching insurance providers. The policyholder can move the NCB from the old insurer to the new insurer while buying the insurance for the new vehicle.


The No Claim Bonus (NCB) serves as a powerful incentive for policyholders to prioritize safe driving and avoid making claims. The ability to transfer NCB to another vehicle adds flexibility and rewards responsible behavior when purchasing insurance for a new vehicle. By fostering a culture of prudence and care on the roads, NCB benefits both insurers and policyholders, ultimately contributing to a safer and more responsible driving community. It stands as a valuable asset, encouraging individuals to maintain their claims-free record and enjoy reduced premiums as a token of appreciation for their cautious approach to driving.

About Aditi Singh 351 Articles
Aditi Singh is an independent content creator and money finance advisor for 5 years. She is recently added with Investment Pedia. Internet users are always welcome to put comments on her contributions.

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