What is NCB in Car Insurance
Everything you need to know about no claim bonus on car insurance in India.
When it comes to car insurance, compensation is offered to policyholders on their request for a claim against the damage or loss incurred by their cars due to an accident or any mishap. This way insurance helps the people who face some adverse events involving their cars. But, what about those who drive responsibly and manage to keep their cars safe? However, if no claim is made, the insured is entitled to receive a reward known as No Claim Bonus.
Table of Contents
What Is No Claim Bonus (NCB)?
The No Claim Bonus is a reward offered as a discount on the own-damage premium of an insurance cover. The policyholders are provided with this bonus for not making any claim request against their insurance cover in a policy year. In order to avail this NCB discount, one should not make any claim in a policy year and ensure the policy renewal within the stipulated time.
How To Calculate No Claim Bonus (NCB)?
The No Claim Bonus discount calculation is cumulative in nature and ranges from 20% to 50%. Under this benefit, the percentage of discount tends to increase with every claim-free year. The bonus earning can begin from a 20% discount and can go up to 50% discount over a span of 5 consecutive claim-free policy years. Refer to the table given below to understand how NCB increases every year:
|
Number of Claim-free Years |
Discount |
|
One claim-free year |
20% |
|
Two consecutive claim-free years |
25% |
|
Three consecutive claim-free years |
35% |
|
Four consecutive claim-free years |
45% |
|
Five consecutive claim-free years |
50% |
When Is No Claim Bonus Applicable?
No Claim Bonus can be applied at the time of car insurance renewal after a claim-free year. The discount earned under this benefit is applicable to the own-damage premium only and not on the third party premium. A single claim request in between can bring an end to the expansion of the cumulative bonus developed with the consecutive claim-free years.
Can No Claim Bonus Get Transferred?
A policyholder earns the No Claim Bonus, not the car. Hence, when someone buys or sells an old car or renews the car insurance from another insurance provider, he or she is still eligible to avail this discount provided no claim has been made by them in the previous policy year. However, policyholders need to acquire an NBC transfer certificate from their insurer to continue to avail this benefit. To ensure this, one needs to renew the policy by its expiry or within 90 days from its expiry date.
Also Read
What is a Car Insurance Claim Process? A Detailed Guide!
IRDAI Withdraws Sale of Comprehensive Motor Insurance Policy
Conclusion
Car insurance becomes economical for responsible drivers and policyholders. The No Claim Bonus is a reward that can be availed by raising no claim against a policy and renewing the car insurance policy within the stipulated time period. People should always keep the benefits of NCB in mind and try to avail it by driving safely.
Disclaimer: This article is issued in 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.
