No Claim Bonus In Your Motor Insurance Policy – 5 Lesser Known Facts

Motor insurance is an essential requirement for vehicle owners, providing financial protection against accidents and damages. One of the significant benefits of buying a comprehensive insurance policy for your vehicle is the No Claim Bonus (NCB). NCB is a reward offered by insurance providers to policyholders for not making any claims during the policy tenure. While many people are familiar with the basic concept of NCB, there are several lesser-known facts about it that can significantly impact insurance premiums. Let’s begin with understanding the No Claim Bonus meaning and the facts that policyholders ought to know.

Meaning of No Claim Bonus in Car Insurance?

As the name may suggest, NCB or No Claim Bonus is a bonus, incentive, or saving offered by the insurance provider to the policyholder to have not made any claims in the past. It serves as a reward for making no claims during the previous tenure of the policy, possibly by virtue of responsible driving. The NCB is applicable to comprehensive motor insurance policies and can be accumulated over consecutive claim-free years. It can lead to substantial savings on insurance premiums. You may be able to use an online No Claims Bonus calculator to get an idea of the savings your claimless policy history could earn for you. ^## Claims are subject to terms and conditions set forth under motor insurance policy.

NCB Facts and How They Affect Premiums

No Claim Bonus (NCB) is a significant aspect of car insurance that policyholders should understand thoroughly. Here are some important facts about NCB and their implications:

- NCB accumulates over consecutive claim-free years

For every year you don't make a claim on your car insurance policy, you earn a higher NCB percentage. This percentage typically starts at 20% and can go up to a maximum of 50%. The longer you go without filing a claim, the higher your NCB percentage and subsequent saving on your premium. ^##

- NCB is transferable from one vehicle to another

If you sell your car and purchase a new one, you can transfer the accumulated NCB to the new vehicle. This feature allows you to retain the benefits of your claim-free record even when you switch cars. Additionally, if you transfer the ownership of your car along with the insurance policy to another person, the NCB can be transferred to them as well.

- NCB protection add-on safeguards your NCB even after making a claim

Opting for the NCB protection add-on ensures that your NCB remains intact even if you make a claim during the policy term. Without this add-on, filing a claim would result in the loss of your accumulated NCB. This add-on provides peace of mind and protects the saving on your premium, allowing you to maintain the benefits of a claim-free record. ^##

- NCB is forfeited if there is a break in your car insurance policy

A break in policy occurs when you fail to renew your car insurance within the grace period provided by the insurer. In such cases, the accumulated NCB is lost, and when you purchase a new policy, the NCB starts from zero. It is crucial to renew your policy on time to avoid the lapse of your NCB.

- NCB significantly affects the calculation of car insurance premiums

The NCB percentage directly influences the saving offered on your car insurance premium. As the NCB percentage increases with each claim-free year, the saving on your premium also increases. For instance, a policyholder with a 50% NCB is eligible for a 50% saving on the premium, resulting in substantial savings. The higher your NCB percentage, the lower your premium, making it an essential factor to consider when renewing your car insurance policy.^##

- You can retain your NCB even when you switch insurance providers

If you decide to change your car insurance provider, you can transfer your accumulated NCB to the new policy. The new insurer will consider your NCB history and provide the applicable saving on the premium.^## This feature encourages policyholders to compare insurance providers and switch to one that offers better coverage and benefits without losing the NCB they have earned. Claims are subject to terms and conditions set forth under motor insurance policy. NCB is a valuable benefit offered by motor insurance policies. It can reward policyholders for responsible driving and maintaining a claim-free record. You can also save on insurance spending with the No Claims Bonus, meaning, it provides an incentive on insurance premiums, leading to significant savings over time.^## Understanding what the meaning of NCB is as well as some important facts about it, such as the NCB percentage scale, transferability, NCB protection add-on, and the impact on premiums, can help policyholders make informed decisions and maximise the benefits of this feature. By preserving your NCB and accumulating it over the years, you can enjoy lower premiums and enhanced affordability while ensuring comprehensive coverage for your vehicle.   All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.