NCB has created quite a stir. It sounds upbeat. Why? There are several explanations for this. First and foremost, comprehend NCB.
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No Claim Bonus is abbreviated as NCB. Yes, you read that correctly. Bonus. Does not this word have the ability to lift your spirits on its own? This benefit, however, is not available to everyone; you must satisfy certain criteria to be eligible.
Continue reading to learn more about why the No Claim Bonus is so vital when renewing your car insurance. It is important to note that NCB is coupled with a comprehensive car insurance policy rather than a standalone third-party insurance policy for cars.
Everything to Know about No Claim Bonus in Car/Vehicle Insurance
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No Claim Bonus is critical in bike/car insurance because these are long-term plans. Essentially, a Claim Bonus is awarded to the insured for every claim-free year. It is generally paid in the form of discounts at the time of insurance renewal. So, if you are purchasing car insurance for your new car or renewing your existing car insurance, being eligible for a No Claim Bonus or NCB can substantially reduce your insurance cost.
So, Why Do Insurance Companies Offer No Claim Bonus in Car Insurance?
Well, you drive carefully for a year without making any claims throughout the car insurance policy period. Your plan period is coming to a close, and it’s time to renew your policy. Your insurance company recognises that you’re a cautious driver and wishes to thank you for not filing a claim. As a result, when you renew your coverage, the insurance company gives you a discount. This incentive is known as bike/car insurance NCB.
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No Claim Bonus: Benefits
The following are the primary benefits of the No Claim Bonus:
No Claim Bonus (NCB) will assist you in obtaining a policy renewal discount. As a result, you will have to pay a lower premium than you would otherwise have for not having an NCB.
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No Claim Bonus is tied to the four-wheeler owner rather than the vehicle. As a result, if you want to sell your old (covered) four-wheeler and purchase a new one, you may carry forward the No Claim Bonus. Also, NCB stays intact with you if you decide to transfer your coverage from one insurance company to the next.
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If you follow the guidelines, the No Claim Bonus is incremental. As a result, if you don’t file a claim in 5 years and renew your car policy on time, you might receive a significant discount on insurance renewal for years.
No Claim Bonus in Car Insurance: How Does It Work?
While all things around you are increasing in price, your vehicle insurance provides you with a unique benefit by offering you the option to cut your car insurance premium rate. You may be wondering how it works, right? Let us dive in!
No Claim Bonus operates in the same manner as any other bonus. It serves as both a reward and a drive to keep up the excellent work. If you do not make any claims during your first policy year, you will receive a 20% NCB discount. As a result, you continue to collect an additional 5% from your second straight year of making no claims. This might result in a 50% decrease in your sixth straight year.
Thus, by including the No Claim Bonus in your car insurance policy, insurance companies encourage you to drive safely while discouraging you from filing claims. In this manner, a car insurance policyholder will think twice about filing claims for minor concerns.
No Claim Bonus in Car Insurance: Why is It So Important?
No Claim Bonus is crucial in car insurance since car owners spend a lot of money on comprehensive car insurance throughout the course of the four-wheeler’s life. The higher the premium amount, the more the car’s value. Because the No Claim Bonus helps to lower premiums, it becomes a significant feature for every four-wheeler owner.
No Claim Bonus Discount on Your Car Insurance Premium Calculation
Here is an example: Mr Sharma and Mr Singhania both purchased expensive four-wheelers of the same make, model, and brand. Both of them paid ₹22,000 for the very first year of car insurance. Due to a decrease in the value of the car, the premium for the second year was reduced to ₹20,000.
Mr Sharma didn’t file a claim during the very first year of his insurance policy, but Mr Singhania was involved in a four-wheeler accident and had to file a claim for damages. As a result, Mr Sharma earned a 20% rebate on the premium due for the second year (claim-free renewal), but Mr Singhania didn’t because his No Claim Bonus was zero.
| Calculation | Mr Sharma | Mr Singhania |
| 1st year Premium | ₹22,000 | ₹22,000 |
| 2nd Year Premium (Claim-free Renewal) | ₹20,000 | ₹20,000 |
| Premium amount after NCB Calculation | ₹16,000 (20% NCB) | ₹20,000 (0% NCB) |
Please keep in mind that the preceding example is only for illustration purposes. NCB is determined on the payable premium’s Own Damage component, not the whole premium.
Here’s an intriguing possibility. If you choose an NCB Protection Add-on/Rider, you may file a claim while still receiving the renewal discount. To receive the advantages of the No Claim Bonus Protection policy, you must pay a fee.
No Claim Bonus in India: Things to Keep in Mind
The following are the important pointers associated with No Claim Bonus in India:
- When Does No Claim Bonus Expire? – If the policy is not renewed (within 3 months of its expiration) or if an insurance claim is submitted without the No Claim Bonus add-on.
- NCB for Commercial Automobiles – Please consult the insurance policy document for specifics since the terms and conditions of the No Claim Bonus in the case of commercial automobiles may differ from one insurance carrier to the next.
- No Claim Bonus and Claim – If you file a claim without purchasing the NCB add-on cover, the No Claim Bonus is reset to zero.
- NCB Proof – The insurance company’s NCB certificate can serve as NCN proof.
The Key Takeaway
You must avoid filing minor claims if you want to keep your No Claim Bonus intact. Try paying such claims out of your own wallet. If the insurance claim is significant and you wish to preserve your collected No Claim Bonus, choose the No Claim Bonus protection add-on/rider.
If you want to buy online car insurance from Tata AIG, compare car insurance premium rates by visiting our official website and selecting the plan that meets your budget and requirements. Also, pick the No Claim Bonus protection add-on to safeguard your plan’s NCB even if you make a claim. Contact us to learn more.
