As per Indian traffic law, every automobile owner must get insurance to comply with the law. In exchange, the insurance company absorbs any expenses incurred in case of an accident. In order to get financial assistance under the terms and circumstances of the insurance policy, the policyholder must file a claim. Insurance providers provide a unique service known as No-claim; NCB insurance (NCB full form in insurance - no-claim bonus), which rewards policyholders for not filing a claim in the preceding years.
By not filing a claim, policyholders might obtain a reduction of 20%-50% on their payable premiums. On the other hand, individuals purchasing their first motor insurance policy for their first vehicle are not eligible for an NCB discount because this is their first experience with motor insurance. If there has been no claim in the previous year, an NCB of 20% can be claimed on the initial renewal of the policy.
NCB operates in the same manner as any other bonus. It serves as a reward and a drive to keep up the good work. Thus, by including the NCB in your auto insurance, insurers encourage you to drive safely while discouraging you from filing claims. In this manner, an automobile insurance policyholder will think twice about filing claims for minor concerns.
NCB is crucial in car insurance since car owners spend a lot of money on Comprehensive car insurance throughout the vehicle's life. The larger the premium, the higher the car's worth. Because NCB helps to lower premiums, it becomes an important feature for car owners.
If you do not file claims for five years in a row, you will receive a 50% discount on your insurance price. However, the percentage will be reset to zero after you file a claim. In other words, as a policyholder, you receive a discount on the payable premium for the following year of the policy if you do not make a claim during that time. Every year without a claim earns you a discount.
The No Claim Bonus is only eligible during policy renewal and only on the 'Own Damage Cover' component of your automobile insurance policy. The term "Own Damage" means the damage done to the insured vehicle. Third-party vehicle insurance is another component of car insurance; purchasing at least this component is needed by Indian law. It is beneficial when the insured car causes a major collision in which third-party property is damaged or a person is hurt.
A Comprehensive automobile insurance policy provides financial protection against damage to the covered vehicle. As a result, NCB is only available on Comprehensive policies and not on Third-party Liability policies.
The NCB protection cover can help with the following:
A No Claim Bonus is a bonus given to a policyholder for not filing a claim. This incentive is granted in accordance with the Insurance Regulatory and Development Department of India's criteria. You can claim the NCB accumulated in your name even if you decide to acquire auto insurance from another company or buy another car (after selling the existing one).
To continue receiving the benefit, you must get a No Claim Bonus Transfer certificate from the insurance carrier. Just keep in mind that there should be no more than 90 days between the expiration date of your insurance policy and its renewal. According to NCB transfer laws, the benefit cannot be transferred to a new owner of the vehicle in the event of a sale because the NCB is associated with the automobile owner rather than the car.
Mentioned below are the benefits of having a no-claim bonus for your car: