8 Things you should know About No Claim Bonus in Car Insurance

It is mandatory to have a car insurance policy for every person owning a car. The policy, depending on its coverage, helps the insured if there is any mishap like accident or theft. While calculating the premium for the policy, there are several factors that come into play. One of the main factors is the no claim bonus.

A no claim bonus is a reward given to the insured by the insurer in the form of a discount for not making a claim in the previous policy year. This discount depends on the claim-free years that the insurer might have had in the past consecutive years.

Let’s understand more about no claim bonus through this one minute read.

1. NCB would be applicable only during car insurance renewal

You might have just bought a car insurance policy. But that doesn’t mean you will be applicable for a NCB. This is because, NCB would be applicable only in case of renewals. NCB ranges from 20% to 50%. The number of consecutive claim-free years are then rewarded with a NCB during car insurance renewal. Mentioned below is the NCB grid you should know:

2. Making smaller claims would take away your NCB

Needless to say that you would lose out on the NCB amount in case of making a claim. Therefore, claims that are smaller should be avoided to register with the insurer. You may spend from your pockets for petty repairs rather than losing out the accumulated NCB. Therefore, be careful before you register a claim. It is imperative to carry out a comparison between the accumulated NCB over the years and the amount that you wish to claim. It surely makes sense to spend money on smaller repairs rather than losing out the NCB reward.

3. NCB is offered individually

If you think NCB is offered to your car, you are absolutely WRONG! This is a reward offered by your insurer to you for having claim-free years in the past. This means, in case you buy a new car post using the old one for almost 5 years, you still will be eligible to get the no claim bonus that you had previously earned on your old car.

4. NCB cannot be transferred from one Person to another

You cannot transfer your NCB to another person. The only exception would be the person who is also the legal heir (the one who has inherited the car). Here, since the car ownership is getting transferred, the car insurance policy and the no claim bonus also gets transferred. During car insurance renewal, the person who has inherited the car has full authority to choose the car insurer of his choice and benefit out of the NCB.

5. NCB is applicable on Comprehensive car Insurance Premium

The NCB that you earn for having claim-free years is earned only on the comprehensive package policy. It doesn’t apply on the third-party liability.

6. NCB in case of change of Insurance Companies

In case you change your car insurance from one insurer to another, you still would be eligible for a no claim bonus.

7. Transfer of No Claim Bonus

If you wish to sell off your old car and buy a new one, all you need to do is follow a simple process to get the no claim bonus transferred. All you need to do is fill up form no 29 and 30 along with a letter mentioning the transfer of no claim bonus. Your car insurance company will then issue a no claim bonus certificate which would be valid for three years. This NCB certificate should be further submitted to the new insurer.

However, if you wish to change the insurance company at the time of renewal of the policy, you will only need to submit the previous year car insurance policy copy. When you buy the car insurance policy online, the NCB is then calculated based on the declaration that you had filled. The insurance company will however cross check for any false information.

8. No Claim Bonus Protector

It is rightly said that add-ons enhance your base policy at an additional premium. One such useful add-on is No claim bonus protector. This add-on aids to retain the NCB in spite of registering a claim. However, it is wise to opt for add-ons only as per your requirement.

Therefore, take optimum care to ensure that you don’t make smaller claims and undergo bigger losses by losing on the accumulated No claim bonus. So, think wisely and act smart!