We all have jam-packed schedules. Our routines take up the most time of the week, and we have to set countless reminders to ensure we do not miss out on some of the important tasks. These can be making payments for utility bills as well as paying your EMI’s on time. While there are implications for late payments, your creditworthiness is at stake in case of loan products. Similarly, a break in your bike insurance renewals also has some effects. It is called the break-in period of your insurance policy.
As you juggle between work and personal commitments, a little planning will help you stay updated with your two wheeler insurance.
What is the break-in period of your two-wheeler insurance policy?
A break-in period is a period between the expiry of your current insurance policy and the purchase of your next one. The 30 days in between where your policy did not offer you any insurance cover is called as the break-in period.
What are the effects of break-in period on your two wheeler insurance policy?
There are two consequences if there is a break-in period to your policy.
- Legal Effect
The Motor Vehicles Act makes it mandatory for each vehicle registered in India to have an insurance policy. The minimum requirement is to have a third-party cover; otherwise, it is a legal offence to drive without one. One can be fined with hefty penalties if found without a valid insurance certificate. Strict compliance is ensured so that any person suffering injuries due to the negligence of the driver is covered under a third-party insurance cover.
- Financial Effect
The primary purpose of motor insurance is to provide financial safety in case you are injured, or your vehicle is damaged. During the break-in period, in case your vehicle is damaged, any expenses will be outside the purview of your insurance policy, and those expenses need to be borne by you. This duration is as good as riding without an insurance cover.
The NCB to your policy
The No Claim Bonus or NCB is a concession in the two wheeler insurance renewal premium offered by your insurance company. This benefit is provided to the policyholders for every claim-free policy year. The regulations provide a 90 day period after which any such accrued benefit is lost.
NCB starts from 20% whereas it goes up to 50% for consecutive policy years without any claims. Here is the table describing the NCB for every claim-free year.
| Number of policy years without a claim | Concession in renewal premium |
| First policy year without a claim | 20% |
| Two successive policy years without any claims | 25% |
| Three successive policy years without any claims | 35% |
| Four successive policy years without any claims | 45% |
| Five or more successive policy years without any claims | 50% |
To conclude, make sure you set a reminder to renew your policy well in advance. You do not want to let go of substantial concessions in your renewal premiums. Also, while renewing, don’t forget to load it with add ons to increase the coverage to your insurance policy. A two wheeler insurance premium calculator is a nifty tool that will help in deciding the affordability of premiums.
