Knowledge Centre

How to Claim NCB Bonus for Your Car Insurance Policy?

A car is usually quite an expensive investment, though worth it. So, you need to plan ahead to make sure that you don’t end up spending money unnecessarily in case of accidents or other unforeseen events. Buying car insurance is a way to protect your finances in case of damages to vehicles, personal accidents, and third-party damages and injuries. If you buy the policy by comparing different plans, you can find the plan best suited for your requirements. This way you can enjoy the benefits you want as well as reduce your premium amount. One key factor that can reduce the premium amount is the NCB or the No Claim Bonus.

What is NCB?

The NCB is the reward or the bonus offered by insurers to policyholders for making no claims in a particular year. The NCB accumulates year after year; for five years maximum.

The NCB discounts can only be used for own damage premiums. It is not applicable to third-party premiums. You don’t get any NCB if you buy only the third-party car insurance policy. Third-party insurance protects your finances in case of third-party damages to another vehicle or property; and third-party injuries. But you don’t get any other benefits.

The NCB is transferrable to another vehicle; in case the policyholder sells the old car and buys a new car. It is not transferrable to another person. You can use your NCB even when you change your insurance company. You can avail of this benefit by getting an NCB certificate or retention letter from your existing insurer. Insurers may have certain conditions for transferring the NCB. So, it is helpful to inquire about it at the time of buying or renewing your car insurance.

In the first claim-free year, you get 20% NCB. In the second claim-free year, it will be 25%. In the third claim-free year, it will be 35%, then 45%, and then 50% (the maximum discount offered). With every no-claim year, the discounts increase by 5%. You can use these discounts to reduce your premium for the next year at the time of renewing your car insurance.

To avail the NCB discount, simply ask the insurer to consider it at the time of renewing your policy.

The Validity of NCB

For NCB to remain valid, the claim-free years need to be subsequent. If you make even a single claim, you lose the previous years’ accumulated NCB.

The NCB will also cease to exist if the policyholder fails to renew the policy within three months from the policy expiration date.

There is a time frame to utilise the NCB. It can differ from one insurer to another. For instance, if you don’t utilise the NCB for a specific period of time or if you don’t have car insurance for 2-3 years, you might lose the accumulated NCB.

You can’t share the NCB between two or more policies. It is valid for one policy only. If you cancel your policy before the renewal date, you will lose the NCB for that specific year.

Policyholders can protect their NCB by paying extra premium for an add-on cover. Theno claim bonus protection add-on cover will protect the NCB even if you need to claim benefits in any particular year.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales

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