A No Claim Bonus or NCB is a reward that policyholders get from the insurance provider if they don’t raise any insurance claims during a particular policy year or for consecutive policy years. Policyholders with a claim-free record can get from 20% to 50% discount on premium amounts from the No Claim Bonus reward. However, individuals should keep in mind that this reward does not depend on the make and age of the insured vehicle.
While purchasing a comprehensive motor insurance policy, an individual cannot get an NCB unless he or she opts for an NCB transfer. After renewing the car insurance policy for the first time, the policyholder will be eligible for a 20% discount on premiums from the NCB. This scenario only applies if the policyholder does not make any claims in the past years. Further, the rate of discount will increase with each claim-free year by up to 50% at the end of five claim-free years.
How is No Claim Bonus in car insurance calculated?
Calculating a No Claim Bonus in any motor insurance policy is a very straightforward procedure. Most insurance providers extend a No Claim Bonus calculator on their official websites to make the calculation process simpler. In the case of motor insurance, NCB starts after the first renewal of the insurance policy. At present, a No Claim Bonus starts at 20% after the renewal and goes up to 50% after five consecutive years of no-claim record.
The NCB will be terminated in case any of the following situations arise:
The policyholder fails to renew an insurance plan within ninety days of its expiry date.
The policyholder files an insurance claim during the policy year.
Importance of a No Claim Bonus
No Claim Bonus is an important facility due to the following reasons:
Policyholders who take care of their insured vehicle and use their discretion while filing claims enjoy the benefits of NCB.
Making timely policy renewals and not raising insurance claims are the deciding factors for an NCB.
Policyholders with a No Claim Bonus can save on policy premiums starting from 20% and going up to 50%.
Changing the vehicle or the insurance-providing company will not result in the loss of no claim bonus.
Terms and conditions of a No Claim Bonus transfer
Here are the terms and conditions of an NCB transfer that one needs to keep in mind:
One can only opt for an NCB transfer from one vehicle to another if the policyholder remains the same
During a policy renewal, one can transfer NCB from one insurance provider to another
Policyholders will need to submit an NCB certificate from the current insurer in case of offline applications
Documents required for a No Claim Bonus transfer:
Here is a list of documents required for a No Claim Bonus transfer:
Photocopy of car insurance
Car delivery note copy
Buyer-seller agreement (Form 29 and 30)
Ownership transfer certificate copy
Copy of booking receipt in case purchasing a new car