Importance of No Claim Bonus In Car Insurance

Cars are their owner’s prized possessions. Maintaining it and taking care of it brings in a lot of expense. If you want to avoid these unwanted and heavy expenses, having a car insurance that offers maximum coverage is the key. Having a car insurance that provides complete coverage is inevitably accompanied with an increased premium cost. In order to reward you for not making any insurance claim during an entire policy year, your insurance provider offers you a discount on the own-damage premium of your car insurance policy on subsequent renewal. This discount is known as the No Claim Bonus (NCB). 

Why Do You Need No Claim Bonus For Your Car Insurance? 

A no claim bonus is a discount offered on your premium by your car insurance provider. This discount is technically the largest discount you can get for your premium and it brings down it’s cost by a decent extent. 

You can get a no claim bonus if you don’t claim your car insurance for over a year. Since the no claim bonus is cumulative in nature, you will receive a higher percentage of discount every year you don’t raise your insurance claim. Which means that your car insurance premium cost will be reduced every year. Thus, it is advised not to claim insurance for minor damages to your car. 

Benefits of No Claim Bonus in Car Insurance

Everyone wants to have a car insurance that provides them maximum coverage but is affordable at the same time. No claim bonuses are the one of the biggest discounts that you can get on your car insurance premium. People who have a comprehensive car insurance premium will already have a higher premium rate. The higher the IDV of the car, the more the cost of the premium. These are the points why no claim bonus is important- 

• Huge Discount 

NCB works on a cumulative basis. Which means that if you don’t claim your insurance for a year, you will receive a discount on your car insurance premium at the time of policy renewal. Thus, you will have to pay less premium compared to the actual amount that you would have paid if you had raised a claim. 

• High Savings 

No claim bonuses are also incremental. If you follow the terms and conditions properly, without claiming insurance consecutively for five years, you will get a significant discount on renewing the policy. This will help you save the money which otherwise, would have been put at the expense of the car insurance premium. 

• NCB Is Transferable

The best part of the no claim bonus is that it is associated with the owner of the car and not the car. If you plan on selling your insured car to buy a new one, the NCB component stays with you if you transfer the policy from one insurance provider to another. This will help you to reduce the cost of your premium largely when you buy a new car. Buying a new car is expensive and the insurance premium for it is also usually high. Thus, no claim bonuses prove to be very effective when it comes to reducing the cost of the premium of your new car insurance.  

Take Away

Most people don’t consider NCB while purchasing car insurance. But, it is important to be aware of the concept if you wish to reduce the cost of your premium. If you want your NCB to be intact in spite of claiming insurance, you should opt for the no claim bonus protection cover. This cover will enable you to claim insurance without disturbing your NCB component. Make sure that you adhere to the terms and conditions of the policy while claiming the NCB and enjoy a discounted premium. 

Also read 

No Claim Bonus in Car Insurance: Know More?

Tips To Avail No Claim Bonus For A Car Insurance Policy

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.