You can save up to 50% on auto insurance with the No Claim Bonus.
“No Claim Bonus” is the full name of the NCB. Yes, you read correctly. Bonus. Doesn’t this word have the ability to lift your spirits on its own? However, not everyone is qualified for this incentive; there are requirements that must be fulfilled.
Discover why NCB is crucial when it comes to renewing your auto insurance coverage by reading on. It should be noted that NCB is not linked to a stand-alone Third-party Liability plan, but rather to a Comprehensive Vehicle Plan.
What does auto insurance’s No Claim Bonus (NCB) mean?
You make no claims during the policy period and drive carefully for a year. It’s time to renew your insurance because your current policy period is about to expire. Your insurance company wants to compensate you for not filing a claim because they recognize that you are a cautious driver. Therefore, when you renew your coverage, the insurer gives you a discount. This benefit is known as a “no claim bonus” for auto and motorcycle insurance.
How does NCB in auto insurance operate? Get a bonus.
Your auto insurance offers you a unique advantage by allowing you to lower your premium even while the cost of everything else in your immediate vicinity is increasing. You ask, how does it work?
It functions somewhat similarly to a system of rewards. For your first insurance year, you begin by receiving a 20% NCB discount if you haven’t filed any claims. As a result, you continue to benefit by an extra 5% from your second year in a row without filing any claims. In the sixth year in a row, this can result in a 50% reduction. In summary, your automobile will benefit you more in the long term if you are a better driver and protect it better.
NCB’s advantages in auto insurance
The following are the main advantages of NCB.
1) High Savings:
If the guidelines are followed, NCB is incremental. Therefore, if you renew your insurance on time and do not file a claim in a five-year period, you might receive a significant discount on policy renewal for years.
2) Discount:
NCB will help you to fetch a discount on policy renewal. This means you will have to pay less premium compared to what you would have paid if you had raised a claim during the policy period.
3) Transferable:
NCB is linked to the owner of the vehicle, not the vehicle itself. Therefore, if you want to sell your old (insured) car and purchase a new one, you can carry forward the NCB. If you decide to transfer your coverage from one insurer to another, NCB remains with you as well.
When Can I Use the No Claim Bonus?
Only the “Own Damage Cover” portion of your auto insurance policy is eligible for the No Claim Bonus at the time of policy renewal. As the name implies, “own damage” refers to harm done to the insured vehicle. According to Indian legislation, it is required to purchase at least the Third-party Car Insurance coverage, which is an additional component of auto insurance. It is advantageous when the insured vehicle causes a serious collision that results in damage to third-party property or injuries to people.
A comprehensive auto insurance coverage provides financial protection against harm to the covered vehicle. Therefore, NCB does not apply to Third-party Liability policies; it only applies to Comprehensive policies.
The No Claim Bonus expires when?
A No Claim Bonus (NCB) may be terminated for a number of reasons. You must remember a lot of things as a policyholder in order to maintain your NCB benefits.
The insurer will withhold or terminate the No Claim Bonus privilege if the insured person makes a claim during the policy term. For instance, there won’t be a claim bonus termination for filing a claim to compensate for damages to the vehicle brought on by an insured risk. Nonetheless, the policyholder’s NCB benefits will continue to be valid if they have the No Claim Bonus Protection Cover. Furthermore, in the event that the policyholder does not renew their auto insurance within ninety days or three months of the policy’s expiration date, the NCB will also
Why Does NCB Matter So Much in Auto Insurance?
Because comprehensive auto insurance costs a lot of money over the course of a vehicle’s lifetime, NCB is significant in the auto insurance market. The premium increases as the car’s value increases. For the car owner, NCB becomes a crucial feature because it lowers the premium.