Meet Rohan. He is an accountant by profession and a cautious driver by nature. He understands the importance of protecting his car and opts for a comprehensive car insurance policy. Throughout the policy year, he drives carefully, avoiding making any claims. The result? When he renews his policy next year, he is rewarded with a No Claim Bonus (NCB). But he has some questions. What is NCB in car insurance? How to check NCB in car insurance?
Do you have similar questions? Read on to know more.
What Is No Claim Bonus In Car Insurance?
No claim bonus in car insurance is an incentive insurance companies offer to policyholders who maintain a claim-free record. It translates to a discount on the premium amount you pay for your car insurance policy renewal. The discount percentage increases with the number of consecutive claim-free years. In simpler terms, the safer you drive and the fewer claims you make, the higher the discount you receive on your car insurance renewal premium.
Here are some benefits of NCB:
- Reduced Car Insurance Premiums
A higher NCB reduces your car insurance renewal premium and makes it more affordable to maintain comprehensive coverage.
- Encourages Safe Driving
The NCB system incentivises safe driving habits, as policyholders are more cautious about avoiding accidents and claims to preserve their NCB discount.
- Increased Coverage Flexibility
You can use the savings from a high NCB to upgrade your car insurance policy or opt for additional coverage to enhance your protection.
How Much Discount Can You Get With No Claim Bonus In Insurance?
The NCB in car insurance depends on the number of consecutive claim-free years. Here’s a table outlining the NCB discount offered for claim-free years:
Number of Consecutive Claim-Free Years | NCB Discount on Premium |
One year | 20% |
Two consecutive years | 25% |
Three consecutive years | 35% |
Four consecutive years | 45% |
Five or more consecutive years | 50% (maximum discount) |
How to Calculate Your NCB in Car Insurance
Now that we have answered ‘What is NCB in insurance?’ let’s examine how to calculate it.
- Identify the number of claim-free years.
This refers to the number of policy years you haven’t filed claims.
- Refer to the NCB discount table.
Match your claim-free years to the corresponding discount percentage in the table above, mentioning the NCB in insurance.
- Apply the discount to your premium amount.
To determine the discount, multiply the NCB discount you obtained in Step 2 by your insurance premium (applicable on Own Damage (OD) premium, excluding third-party liability premium).
For example, let’s say your car insurance with no claim bonus clause has a premium of ₹20,000, and you’ve maintained a claim-free record for three consecutive years. As per the table, the NCB in insurance for three claim-free years is 35%.
So, what’s the amount of no claim bonus in car insurance? Here’s the calculation:
NCB Discount = 35/100 * ₹20,000 = ₹7,000
Therefore, your three claim-free years make you eligible for a discount of ₹7,000 as a no claim bonus in insurance premium renewal.
How To Check No Claim Bonus For Car Insurance?
You can check your NCB by referring to your previous car insurance policy documents or contacting your insurance company.
When Do You Lose Your NCB in Car Insurance?
What is no claim bonus in car insurance? Your reward that saves your hard-earned money! But you should look out for the following to avoid losing your NCB in car insurance. These include:
- Filing a claim during your policy period. Even a single claim filed will reset your NCB discount to zero. . Not renewing your car insurance with no claim bonus clause within 90 days of expiration. A lapse in coverage exceeding 90 days will cancel your accumulated NCB.
Transferring no claim bonus in car insurance policy
Your NCB isn’t tied to your vehicle but to you as the policyholder. As such, it offers flexibility when switching cars or insurers.
- To transfer NCB to a new car, ensure it’s in the same vehicle class and inform your insurer, providing the necessary documentation.
- When changing insurers, inform the new company of your NCB entitlement, possibly needing to provide previous policy documents or NCB certificates for verification.
What Is NCB Protection In Car Insurance?
Some insurance companies offer an add-on cover called NCB protection in car insurance. This add-on allows you to retain your NCB even if you file a claim up to a pre-defined limit during your policy period. However, this benefit comes at an additional premium cost.
So, by maintaining a claim-free record, you can reduce your car insurance renewal premiums and enjoy the benefits of a safe driving record. Now that you have answers to ‘What is NCB in car insurance’ and how to check NCB in car insurance, you can get a car insurance with no claim bonus with Generali Central. Generali Central offers comprehensive car insurance policies with additional features to ensure maximum coverage and peace of mind for policyholders.
