How to Use NCB Effectively to Save on Car Insurance Premium
How to Use NCB Effectively to Save on Car Insurance Premium
Car insurance is not just a luxury, it is a necessity. If you have a car in India, it is a rule to get an insurance plan to cover it. If you choose to buy a comprehensive car insurance plan, you get several benefits like the choice to add riders. You also get regards and discounts such as the no-claim bonus. What exactly is what is NCB discount in car insurance and how is it effective? Take a look at this article to get the answer.
Understanding no claim bonus
As the name suggests, the no-claim bonus (NCB) is a bonus you get for not making any claim within a particular policy tenure. It is a reward given to you for driving safely and staying out of road mishaps. You get it in the form of a discount for the following year's premium. The NCB in car insurance accumulates each year. It can even go up to 50% if you do not make a claim for 5 consecutive years. However, even one claim in between can take the accumulated NCB away and reset it to zero.
Using your no-claim bonus wisely
As stated, the NCB is a bonus you get in the form of a discount on the new policy premium. Here are some wise ways of using it to ensure you get the maximum value out of it:
1. Ensure the correct discount is applied
As already stated, the NCB is offered as a discount on the car insurance premium for the next year. When you renew car insurance, make sure the correct discount is applied. It gets done automatically if you continue with your existing policy. However, check the figures thoroughly before you make the payment. There may be some glitches in the online payment mode and your discount may not be applied. Assess the premium rate, and if there is any discrepancy, speak to your insurance provider and get it sorted out. If you port your policy to another insurance provider, you may have to double-check to ensure your NCB has been applied. Do not part with the bonus - remember, it is a reward that you have rightfully earned and deserve.
2. Take care of small repairs yourself
The accumulated NCB will disappear even if you make one claim on your comprehensive insurance plan. Hence, you need to think twice before you make a claim, especially when the claim amount is low. If you can handle the repair costs on your own, then do so, as that will help you to save your NCB and keep getting a discount every year. If however, the claim amount is large, do not hesitate to get a claim from your car insurance plan, as the ultimate aim of car insurance is to get coverage against large damages.
3. Get an NCB protection rider
Another handy tip is for you to get an NCB protection rider. It is a highly beneficial add-on cover that you can purchase along with the comprehensive car insurance plan. It goes a long way in ensuring your NCB stays intact, even if you make a claim. This will help to effectively get the bonus in the form of discounts every time you renew your car insurance coverage, thereby helping you save a lot of money in the long run. An NCB protection rider is one of the most popular car insurance riders, but you have to get it by paying an additional premium. Hence, keep the cost factor in mind when you choose this rider.
4. Transfer the NCB at the right time
If you sell your car and get a new one, you can get your NCB transferred to the new policy. This is because the NCB is given a bonus meant for the driver, not the car. If you change your car, ensure you get your no-claim bonus transferred to the new car insurance plan. You will have to send an application to the insurance provider and get the transfer done. It is a quick and easy process, so don't ignore it. You can use your accumulated NCB for your new policy and make some handsome savings on future premium rates.
These are some simple ways in which you can protect and use your NCB effectively. Remember them when you buy or renew car insurance so that you don't miss out on the discount you deserve.
The bottom line
Now that you know how to save on car insurance premium with NCB, go ahead and get it done. Thankfully, there are some great ways in which you can use your NCB effectively to save money when you buy a motor vehicle insurance plan. From using the available discount to getting the reward transferred to a new plan, you can do many things to manage your finances efficiently. Keep all the points mentioned above in mind and start exploring the options that the NCB feature offers. Also, consider getting the NCB protection rider as that can help you to keep the accumulated NCB safe even when you need to make a claim and continue to help you save money year after year.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.
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