Everything You Should Know About No Claim Benefits (NCB)

Posted by Bhargav Baweja on June 4th, 2018

With the daily increase in the number of cars on Indian roads, it becomes even more important to have a motor insurance nowadays. Moreover, many drivers don’t care about the safety of others, and they drive their vehicles rashly, causing damage to others. Having insurance policy takes care of your financial load in case you meet with an accident.

Car insurance premium is paid annually to the insurer and is a saving grace for bad times when you meet with an accident, or someone else damages your car in an accident. In case of such accidents, the insurance company settles the medical as well as the garage bills for you. If you raise a claim to the insurance company, they will bear the loss. Insurance policies have many benefits out of which No claim bonus (NCB) is one of the most important features. Everyone loves rewards for their good behaviour. It is the rule of the world that good behaviour never goes unrewarded. The same applies to car insurance. Your insurance company offers you a reward in the form of a discount on your next year’s premium when you renew the insurance policy.

Here are some facts about No Claim Bonus to keep in mind:

1. Amount of no claim bonus:

When you first buy your car insurance, the company will not offer you any discount (NCB), but it starts from the subsequent years. NCB discount starts from the second year of insurance and the discount starts from 20% and reaches its maximum at 50% on the premium to be paid. Getting this bonus is not just a right but it is a reward for not making any insurance claims for the previous year.

2. NCB is for you, not your car:

Even if you switch cars every 5 years and you have a good track record of not making any claims from the insurer, then you are eligible for NCB. If you have not made a claim in the past three years and are eligible for a 30% discount, then that discount is still valid even if you buy a new car.

3. Valid in case you switch insurance companies:

NCB is not restricted to one company only. You can switch your insurers annually, and you are still eligible for a discount.  The insurer will check your insurance history just to make sure everything is in order and you can avail the bonus. If you are buying car insurance online, make sure you submit the NCB certificate during the renewal to avail the discount.

4. Avoid claiming small amounts:

Claiming small amount causes a bigger loss. If the amount you are claiming is lesser than the amount of discount you will receive, then it makes no sense to claim that amount. E.g. if your side mirror is damaged due to a collision and it costs Rs 1000, and you are eligible for Rs. 2500 discount for not making any claims, then don’t claim the amount you spent to repair the mirror.

Having proper car insurance is always a good thing as it is a safeguard for your finances. No claim bonus is a wonderful reward by insurance companies for being a good driver and is one of the best ways to encourage safe driving.