Every automobile owner is required to get car insurance – there are no exceptions to this law as set by the Motor Vehicles Act of India. The policyholder pays a premium amount in exchange for this. In exchange, the insurance provider pays for all related costs in the event of an accident.
No-Claim Bonus (NCB), a novel concept offered by auto insurance companies, rewards customers for not filing a claim in the years before. The policyholders might receive a concession on the payable premiums of between 20 and 50 per cent by refraining from filing any claims. However, as it will be their first-time purchasing motor insurance, those buying their first policy for their first car are not eligible for any NCB concessions. If there haven’t been any claims in the previous year, a 20% NCB may be requested when you renew your car insurance.
What is NCB in car insurance – Here are the five essential NCB facts that every car owner should be aware of:
- The NCB Amount
Auto insurance companies offer NCB in the 20 to 50 percent range. The policyholder receives a 20 percent bonus if they do not file any claims in the first year of their coverage. The NCB is increased to 25% if the policyholder does not file a claim for two consecutive years. Similarly, the policyholder receives a bonus of 35% after three years in a row with no claims. A 45 percent incentive is given to the policyholder for four years with no claims. He would receive a 50% bonus amount for five years with no claims.
- Skip Minimal Claim Amounts
Before filing a claim with the insurance company, policyholders should consider the claim amount the firm will pay them. Then, if they decide against filing a claim, they should compare this sum to the bonus they would have received.
- NCB Is Relevant When Changing Insurers
Even when transferring from one insurance company to another, NCB is still available. For example, consider a policyholder buys motor insurance from Provider X for two years and then switches to Provider Y in the third year without making any claims. In this case, they can receive a 25% NCB from Provider Y.
- Policyholders Are Eligible For The NCB, Not Their Vehicles
Policyholders are compensated with NCB rather than their cars. For example, say a policyholder sells their car after three years without any claims and purchases a new one. In this scenario, their previous No Claim Bonus (NCB) will apply to the car insurance policy for the new car.
- There Is No NCB For Third-Party Coverage
Third-party auto insurance does not qualify for the NCB, and this concession solely applies to the own damage premium portion. Only third-party auto insurance policyholders are not eligible for the NCB bonus.
Driving successfully involves more than just paying attention to the road; it also means defending yourself from other drivers who need to be more cautious.
Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.