What is No Claim Bonus in Car Insurance?
No Claim Bonus or NCB is a premium low cost supplied by insurance coverage firms to car homeowners who haven’t made a single declare through the time period of the motor insurance coverage coverage.
The reward for good drivers
If you’re a good driver and you’re advised that you may be rewarded for having an excellent ability full and secure driving? A No Claim Bonus does simply that! You can profit from being a secure driver and never making a declare while you renew your insurance coverage coverage by benefiting from a clause referred to as the No Claim Bonus.
Encourage drivers to be secure on roads
The clause has been designed to encourage drivers to be secure on roads. If you haven’t claimed insurance coverage for damages to your car or to your self in the previous yr, you’re eligible for this Bonus the following yr. The better the variety of years the place one hasn’t claimed insurance coverage, the upper the low cost supplied. Will clarify this in additional element in the next paragraphs. A better low cost on account of “No Claims” makes your Car Insurance Policy extra reasonably priced.
A win-win mechanism
The No Claim Bonus is a win-win mechanism for each the insurer and the insured. The insurer advantages from not having to pay through the interval insured for. Some of that profit will get handed on to the insured by means of a No Claim Bonus.
With this Bonus, the insured has an indicative reference round what shall be his/ her premium quantity the next yr. For instance, you personal a hatchback automobile that is 5 years previous. You haven’t claimed insurance coverage in the previous 5 years. In this case, you’re eligible for a reduction of 45% on the premium.
Subject to overview and alter
While the low cost obtainable is pretty standardized throughout insurers, it is topic to overview and alter. Therefore, it is essential to grasp this side earlier than finalizing your coverage buy and the insurer from whom you buy the coverage.
Generally, the low cost slabs are as follows: 20% for the second yr, 25% for the third yr, 35% for the fourth yr, 45% for the fifth yr, and 50% for the sixth yr. The saving potential stands at a minimal of Rs.2,400 (at 20%) to a most of Rs.6,000 (at 50%) on a premium of Rs.12,000 for a automobile insurance coverage plan.
Thes Bonus could be carried ahead offered the coverage is renewed inside 90 days of the expiry date. A No Claim Bonus is relevant solely to the “own damage” a part of the premium. This interprets to 80% of the coverage premium. The premium for third-occasion injury constitutes the remaining 20%.
Your No Claim Bonus stands invalid below the next major situations (moreover others as specified by your insurer):
- If you’ve got made a declare through the previous yr, you can not declare a No Claim Bonus in the present yr. Similarly, you can not declare a No Claim Bonus the following yr, in case you have already claimed insurance coverage in the present yr.
- You can not avail of a No Claim Bonus for a lapsed coverage. So it is essential to make sure you renew your auto insurance coverage plan throughout the stipulated time-frame. In most cases, firms present a 90-day window for auto insurance coverage renewal of the present coverage.
Tips for No Claim Bonus:
Here are just a few ideas you may need to contemplate whereas using your No Claim Bonus:
- A No Claim Bonus could be transferred from one car to a different offered the policyholder is the identical. This is as a result of the No Claims characteristic is linked to the insured and never the car. However, please notice that the car kind must be the identical.
- If you at present have two-wheeler insurance coverage and you’ve got bought a brand new hatchback automobile, the No Claim Bonus you’ve got earned on your two-wheeler can’t be availed on your new automobile.
- You can’t solely switch your No Claim Bonus from car to car however from insurer to insurer. In order to switch your No Claim Bonus low cost out of your previous insurer to your new insurer, you’ll have to observe the procedures as listed by your present insurer.
In some circumstances, it could be prudent to not declare insurance coverage if the price of restore is estimated to be decrease than the No Claim Bonus low cost you may be eligible for in the next yr.
Many insurers provide a No Claim Bonus solely for patrons that buy auto insurance coverage on-line. Do background analysis if this is the case with the insurer you plan to buy your auto coverage from and in addition consider the low cost slabs and premium outgo earlier than you determine in your Car Insurance Policy. Compare correctly!
Subscribe to us to get the newest posts from FinBharat.com & keep up to date.