Benefits of No Claim Bonus in Car Insurance

Posted on: Feb 19, 2019 | | Written by:

Benefits of No Claim Bonus in Car Insurance

Published on September 23, 2019. EST READ TIME: 3 minutes

Benefits of No Claim Bonus on Car Insurance

We know how crucial comprehensive car insurance is for all car owners since it provides financial security. However, as a car owner, are you aware of the no claim bonus on car insurance and its benefits?

Simply put, a no claim bonus is a special reward for being a careful driver and not claiming your insurance during the policy term. The idea behind this concept is straightforward yet encouraging: the longer you go without filing a claim on your car insurance policy, the more rewards you receive. It's essentially a token of appreciation from insurance providers for your dedication to safe driving habits.

Let's understand the no-claim bonus on car insurance and how to avail it in detail.

What is a no-claim bonus car insurance?

No-claim bonus or NCB is a premium discount provided by insurance companies to vehicle owners who have not made any claims during their motor insurance policy term. The NCB is typically a discount of 20%-50% and is applied when renewing the policy.

Hence, this discount applies to the premium amount at renewal and can be transferred to a new vehicle if the policyholder decides to purchase one.

Typically, the premium discount for the second year is 20%, increasing to 25% in the third year, 35% in the fourth year, 45% in the fifth year, and finally, 50% in the sixth year. The extent of the discount depends on your insurance claims during that specific year. It's important to note that you can carry forward your no claim bonus (NCB) only if you renew your policy within 90 days of its expiry date.

How to Avail No Claim Bonus?

Availing a No-Claim Bonus (NCB) is an easy process that can lead to significant savings on car insurance premiums. Here's a simple guide on how to do it:

• Drive Safely and Avoid Accidents: The first and most important step is to drive safely and avoid accidents. The longer you go without making any claims on your car insurance policy, the higher your no claim bonus will become. Hence, this means driving responsibly, following traffic rules, and being cautious.

• Renew Your Policy: When renewing your car insurance policy, inform your insurance provider that you have a claim-free record and are eligible for a no claim bonus.

• Claim-Free Years: Your NCB accumulates over claim-free years. Each year you go without making a claim, the NCB percentage increases. The NCB percentages typically range from 20% to 50% and can increase annually to a certain limit.

• Transfer Your NCB: If you switch your insurance provider, you can transfer your accumulated NCB to the new policy. To do this, you'll need to obtain a No-Claim Bonus Certificate from your previous insurer. This certificate proves your claim-free record and helps you get the deserved discount on your new policy.

• Select the NCB Option: When purchasing or renewing your car insurance policy, select the option to apply your No-Claim Bonus. The premium for the policy will be calculated with the NCB discount factored in.

• Keep Records: Maintaining a record of your claim-free years and any No-Claim Bonus certificates you receive is a good idea. Hence, this can be convenient if there are discrepancies or issues when transferring your NCB to a new policy.

Drive Safe To Save Big!

Driving safely can lead to saving huge on the No Claim Bonus in Car Insurance . As the years go by and you continue to drive without any accidents, your no claim bonus keeps increasing. Moreover, this bonus is like a reward card that offers you a bigger and bigger discount on your car insurance premiums every time you renew your policy.

So, when it's time to renew your car insurance, the No-Claim Bonus you've earned becomes incredibly valuable. It can lead to significant savings sometimes even up to half of your insurance premium! Hence, this means that because you've been a safe and responsible driver, you get to keep more money in your pocket.

For your reference, here is a tabular representation of the NCB percentage over the years:

Number of Claim-free Years	NCB Discount
After 1st claim free year	20%
After 2 consecutive claim free years	25%
After 3 consecutive claim free years	35%
After 4 consecutive claim free years	45%
After 5 consecutive claim free years	50%

Did You Know the Benefits Of No Claim Bonus On Car Insurance By HDFC ERGO?

No claim bonus is one of the popular features offered by various insurance companies, including HDFC ERGO. It is offered to the driver and not to the car. Hence, if you plan to sell your current vehicle, the benefits of the no claim bonus can be transferred to the subsequent car you buy within three years of the sale.

Once you purchase your new vehicle, simply submit a written request for an NCB reserving letter to transfer your existing no-claim bonus to the new car. Please be prepared to provide supporting documents when submitting your request.

When switching your car insurance from another company to HDFC Ergo, you can smoothly transfer the no claim bonus you have earned on your previous policy to the new one with HDFC ERGO.

If you decide to switch insurers when your policy is up for renewal, you can also transfer the benefits of the No Claims Bonus (NCB).

Conclusion

We hope you find all the information about the no-claim bonus benefits on the car insurance policy. To reap the maximum benefits of the no claim bonus, ensure that you are a responsible driver and avoid insurance claims for minor damages that your car sustains.

For more details about the no-claim bonus, reach out to the professionals at HDFC ERGO.

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

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