Insurance companies may renew their premium policies depending on factors like inflation, changes in the coverage, risk and financial performance of the insurer. However, the amount of premium charged on your online car insurance also depends on the policy selected, the geographical location, the make and model of the car and many other factors.
Although there are a few ways that can help you reduce the premium burden, NCB in car insurance is one of the most effective and common methods. In NCB, when you do not make any claim, you get a discount on the premium at the time of policy renewal.
Want to know more about NCB in a car insurance policy? Continue reading.
What is No-claim Bonus
No-claim bonus is generally a benefit which is given by the four-wheeler insurance companies to the policyholders for not making any claims during the policy period. It is an excellent way through which individuals can save on their car insurance premiums.
The longer the policyholder refrains from making any claim, the greater the NCB percentage they earn. Hence, NCB can help car owners to reduce their insurance premiums by up to 50%.
Benefits and Importance of NCB
Below are some of the benefits of a no-claim bonus in a car insurance policy:
- A non-claim bonus can make your policy more affordable. You can save roughly around 20-50% on your car insurance premiums at the time of renewal, but that is only applicable if you have a zero-claim history.
- Insurers are often seen offering NCB as a reward to the policyholders for safe driving and better vehicle maintenance.
- NCB is linked to the policyholder or driver and not to the insured vehicle. Therefore, if you plan to sell your old vehicle and buy a new one, NCB can be transferred.
NCB Slab
To get an NCB certificate, you first need to know about the slabs that apply to the number of claim-free years:
| Claim Free Renewals (in years) | Discount on Premium |
| On the first claim-free renewal | 20% |
| On the second claim-free renewal | 25% |
| On the third claim-free renewal | 35% |
| On the fourth claim-free renewal | 45% |
| On the fifth claim-free renewal | 50% |
Note: Discount is typically capped at 50% for cars that have zero claims for more than 5 years.
How to Calculate NCB and its exceptions
Calculating a no-claim bonus for a car insurance policy is a much simpler process. It starts when you renew the motor insurance policy for the first time. Typically, a no-claim bonus starts at 20% in the first year and then goes up to 50% for five subsequent claim-free years.
Remember that a no-claim bonus certificate for car insurance will be invalid in the following situations:
- If the policyholder does not renew the insurance policy before expiry, typically within 90 days from the expiration date
- If the policyholder submits an insurance claim during the policy tenure.
- The NCB will be cancelled if there are any fraudulent own damage (OD) claims or any misappropriation of facts regarding the claim.
- You cannot add or remove the No Claim Bonus coverage from your insurance policy in the middle of the policy term until renewal.
- The vehicle should be repaired in a network or authorised garage to have the benefits of this add-on.
- If the insured exceeds the number of claims, then in that case, this benefit will not be applicable.
Documents Required For Car No-Claim Bonus Certificate Transfer
To get your NCB transferred, you need the following documents to submit as proof:
- Photocopy of the car insurance policy.
- A copy of the car delivery receipt.
- Transfer application.
- Car No-Claim Bonus Certificate
- Agreement made between the buyer and seller
- Ownership transfer certificate copy
- If purchasing a new car, then you must have a copy of the booking receipt.
When Does NCB Gets Cancelled
- If you make any claim during your active policy period, NCB may be cancelled, depending on the policy’s terms and conditions.
- If you fail to renew your policy within the stipulated period, you can lose all your no-claim bonuses collected to date.
- If you continue switching over to multiple insurance providers, your NCB might not get transferred, which would lead to cancellation.
Conclusion
The NCB certificate is given for safe and responsible driving, as well as for not filing minor claims that can be managed out-of-pocket. By understanding how NCB works and taking advantage of its benefits, you can enjoy significant savings on your car insurance premiums over time.
Frequently Asked Questions
1. Is NCB applicable for more than one car?
Your no-claim bonus applies to only one car.
2. How long is NCB valid?
Until the next claim is made, NCB is applicable.
