How to Claim NCB on New Car Insurance Policy Premium?

Posted on: Mar 8, 2022 | | Written by:

How to Claim NCB on New Car Insurance Policy Premium?

Car accidents are unexpected and can happen anytime. So, if you do not own car insurance, you may end up paying for legal fees, repairing costs, medical expenses all from your pocket, and on top of it you will be in a tight spot since owning third-party liability car insurance is mandatory in India as per Motor Vehicle Act of 1988.

The most important benefit of owning insurance is that the insurance company helps you in case you get involved in an accident. If you opt for comprehensive car insurance, apart from accidents, the insurance policies offer protection against natural calamities like hurricanes, storms, earthquakes apart from providing coverage of man-made crises like riots, terrorist attacks, theft, etc. on top of covering third-party liabilities. If you do not make any claim during a certain financial year, motor insurance policies provide a no claim bonus in car insurance as a reward. Let us learn more about the No Claim Bonus, better known as NCB.

What is a No Claim Bonus?

NCB, no claim bonus refers to a discount on your insurance premium that you can avail of if you spend an entire financial year claim-free. With the no claim bonus in car insurance, the company rewards the customer for being responsible and taking good care of the car. If you do not make any claims for a few years constantly, you can accumulate up to a 50% NCB discount on premiums.

Claim free years	No Claim Bonus Discount
If no claims made in the first year of insurance	20%
If no claims are made in 2 consecutive years of insurance	25%
If no claims are made in 3 consecutive years of insurance	35%
If no claims are made in 4 consecutive years of insurance	45%
If no claims are made in 5 consecutive years of insurance	50%

There are a few things you should know about the NCB bonus that will help you in purchasing policies.

1. You do not lose your No Claim Bonus if you purchase a new car

Interestingly, the NCB bonus is rewarded to the car-owner/policyholder and not to the insured car. Hence, if you are purchasing a new car and want to transfer the No Claim Bonus reward to the new car, you are allowed to do that.

2.Your NCB reward can reduce the premium amount by 20%-50%

For every claim-free year, you receive a discount on your premiums to be paid. By the end of the fifth year, you can get a discount of up to 50%. You cannot receive more discount than this. Even if you spend one more claim-free year, the discount will continue to be 50%.

3. Double Check While Mentioning the NCB Reward

Even if your intentions are not wrong but you write down the wrong entry for NCB reward, it may end up in your insurance being annulled. While switching policies be precise with your NCB reward, wrong information will result in the rejection of your claim altogether. If you have made any claims with your previous insurer make sure to mention that to your new insurer. Insurance companies can easily source information so it is no good to mislead or hide information.

4. Changing the insurer will not affect your NCB

The policyholder can still benefit from the NCB bonus even if he/she is not related to the previous insurance company anymore.

How To Claim No Claim Bonus?

No claim bonus is rewarded to each policyholder for the claim-free year/ years and for being a responsible driver and driving safely, reducing the risk of accidents. These rewards are given to the policyholder. The car insurance policy is used to calculate your no claim bonus for the current year. So, when you renew your car insurance policy online or offline, make sure to fill in the NCB percentage when filling in the details. Your premium amount will decrease as per the number of claim free years.

Here is how you can use the NCB of your previous car to reduce the premiums of your new car’s insurance policy.

● Earn NCB on Your Old Car

The best way to earn NCB on your car is to drive safely, maintain the rules and avoid getting into accidents and raising claims. Not raising claims does not mean that you will bear all the costs of damage repairing from your pocket but what it means is avoiding raising claims for minor repairs that you can easily afford. This helps in keeping your no-claim bonus intact.

● Retain the NCB While Purchasing the New Car

No claim bonus in car insurance keeps on increasing each year for five consecutive claim-free years. The maximum discount you can avail of on your car insurance policy is 50%. From the sixth year, you continue to enjoy the 50% discount on the payment of premiums until you raise a claim or fail to renew the policy for more than 90 days. When you have accumulated the discount and want to purchase a new car, you can transfer the NCB to the new car policy. It means you will be able to enjoy a 50% discount on your premium payment for the new insurance.

● NCB Certificate

When you want to transfer the NCB of your previous car insurance to the new insurance, you need to get the NCB certificate from your insurance company.

This is a necessary document for NCB transfer. There are two cases possible:

a) If you buy the new insurance from the same insurance company, you can request the insurer for a copy of your NCB certificate.

b) If you buy the new insurance from a new insurance company, you need to request your previous insurance company for an NCB transfer letter and NCB certificate to avail of the discount on the new policy from a different insurance company.

Things to Remember when Claiming NCB:

1. NCB is available only on Comprehensive Insurance Plans, not Third Party insurance policies.

2. No Claim Bonus is tied to the policyholder and not the insurance policy.

3. Try to cover the small repairing costs from your pocket and avoid making claims, it will keep your NCB intact.

4. NCB is applicable on switching insurers and even vehicles.

5. NCB is offered between 20%-50% on the premium amount to be paid, based on the number of consecutive claim-free years.

6. You can also opt for the add-on cover NCB Protect, where even if you make a claim, the NCB stays intact.

Conclusion

Driving is more than just being attentive on roads. It includes your conscious efforts put into keeping others safe on the road and avoiding accidents. And recognizing your efforts, the insurance companies reward you with NCB protection cover. Thus, No claim bonus in car insurance is quite an important aspect and mustn’t be overlooked.

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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