Benefits of a No Claim Bonus on a car insurance policy
Why No Claim Bonus is important in Car Policy
What is a No Claim Bonus on a car insurance policy?
A No Claim Bonus (NCB) can be considered as a discount on car insurance premiums that are earned by policyholders who do not make any claims during the policy period. You can claim this discount during the renewal of your car insurance. The discount can range from 20% to 50% off your next premiums of the car insurance policy, depending on the number of consecutive claim-free years.
It is also important to note that the No Claim Bonus belongs to the owner itself and not to the car, which simply means that you can transfer the benefits of NCB to your new car.
A No Claim Bonus comes with several benefits that may include the following:
1. Reduced premiums -
Policyholders who have an NCB can enjoy lower car insurance premiums. The amount of the discount varies depending on the insurance company and the number of consecutive claim-free years, but it can be as high as 50% of the premium.
For example, if you have to pay an insurance premium with an own damage component of Rs. 18,000 and haven’t made any insurance claim for five consecutive years. You will become eligible to get a 50% discount (No Claim bonus) on your premium or a total of Rs. 9000/- off on the premium.
2. An incentive to drive safely -
An NCB also acts as an incentive for policyholders to drive safely and avoid accidents, which can help reduce the number of claims and greater NCB discounts on the Insurance premium.
3. Accumulation over time -
NCB can be accumulated over time, meaning the longer a policyholder goes without making a claim, the more the discount will be. The 1st claim-free year may grant you a discount of around 20%, while the No Claim bonus for five consecutive claim-free years can go up to 50%.
4. Transferable -
No Claim Bonus or NCB is not tied to a single insurance company or a single car; rather, it is tied to the policyholder who has not made any insurance claim for a full insurance term. So, the benefits of NCB can be easily transferred to a new car insurance policy even if you change insurance companies or vehicles.
As a policyholder, you only need an NCB certificate to transfer your NCB benefits to a new insurer. You can request the insurer to provide an NCB certificate.
5. A way to lower your car insurance costs -
If you are a safe driver, then a No Claim Bonus can be a great way to lower your car insurance costs. No Claim bonus can also be seen as proof of you being a responsible driver. Insurance companies may provide you with some additional benefits apart from the discounts associated with the No Bonus Claim.
Being careful with your driving on the road has many benefits for you and everyone associated with you. Your insurance company also surely appreciates that. No Claim Bonus is just an additional benefit rewarded to you for being a safe driver. So, keep driving safely.
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Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.