Did you know that if you have been a safe driver and if you didn’t make a car insurance claim, then you could look forward to be rewarded with a discount? Many insurance companies recompense the good drivers by providing a discount on their policy. You might save anything from 20% to 65% on your premium and end up getting cheaper car insurance. |
This reward offered by the insurance companies is known as no claim bonus (NCB). In simple words, it is a benefit for all those policy holders, who have not claimed insurance during the preceding year of cover. It means the premium they would pay in the following year would be lower. It can be availed under the comprehensive motor insurance policy. The policy covers loss or damage to the vehicle covered and third-party liability. The NCB for cars and two wheelers start @ 20% in the second year and can go up to a maximum of 50% in the sixth year, it is the same across all insurers. It is important for you to know that how can you save it. The simple way would be that in case your vehicle gets damaged, get an estimate for the repairs. If the NCB sum you might have to give in the approaching years goes beyond the calculated sum you spend on repairing the vehicle, it makes sense not a raise a claim and shell out for the damage yourself.
If you are wondering why opt for it, then you should know certain facts. In addition, you can also save on the first premium of a new vehicle, subject to certain conditions. Since the no claims trait is linked to the insured and not the vehicle, you can not only reassign your NCB from insurer to insurer, but also to a new vehicle of the same type. For instance, you can transfer a no claim bonus of an old two-wheeler to a new two-wheeler only, and not a four-wheeler. However, one important thing you need to know here is that as the policyholder you need to have sold your old vehicle for a new one and also have accumulated NCB, however the reserving of the NCB can be done only upto 3years.
Along with all this it’s also important that you are aware of the conditions applied to it. One of the most significant conditions attached is that NCB is relevant only to the ‘own damage’ part of the premium, which is eighty percent of the policy premium. Third-party damage premiums structure the remaining twenty percent. However, some insurers now propose an add-on cover, which protects the policyholder’s NCB. For instance, a policyholder having taken an added policy would still hold his 20 per cent no claim bonus, in spite of having made an insurance claim in the same year.
Last, but not the least, the most important thing to remember is that in case you make the insurance claim, then you can wash several years of no claim bonus (NCB), which means you will have to pay more for your insurance. For this reason, you should think carefully before making a small claim as it may end up costing you more in the long run!
For more information visit: No Claim Bonus (NCB) and Insurance Claim Process.
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