No Claim Bonus Covers Your Extra Expenses

Posted on: Feb 10, 2022 | | Written by:

No Claim Bonus Covers Your Extra Expenses

Published on February 9, 2022. EST READ TIME: 3 minutes

Insurance policies impose premium charges for maintaining your financial safety. If you face any risks or suffer financial losses, the company provides compensation for your incurred losses. But what if you don’t face any losses during your policy tenure?

They reward you with No Claim Bonus if you don’t claim any compensation from your general insurance policies in a policy year. To understand the features and other aspects of the No Claim Bonus, follow the guidelines mentioned below.

What is a No Claim Bonus?

Popularly known as NCB, No Claim Bonus is a bonus offered under certain policies if you do not claim any reimbursement during the coverage phase. Once you renew your policy, insurance company either offers you premium discounts or increases your coverage level without changing the premium. The offered discounts range between 20 percent to 30 percent and are transferable as per the policy changes made by the policyholders.

How do you calculate a No Claim Bonus?

As a policyholder, you can start calculating your No Claim Bonus from the second year of your policy period. After a year of no claim, your company will provide you with a 20 percent on your premium account.

The types of No Claim Bonus

There are two ways to avail a No Claim Bonus:

Cumulative Bonus: You receive a No Claim Bonus, once your insured amount increases. However, in a claim-free year, your premium remains the same.

Premium Discount: From the second year, you receive a 20 percent on premium account from your insurance provider.

The features of No Claim Bonus?

The best way to receive coverage for medical and car inflation is to boost your insurance status without paying any sort of extra charges. There are several useful features of a No Claim Bonus, listed below:

1. The amount you insure increases by 5 percent to 50 percent based on the coverage. You receive a cumulative rise.

2. The insured amount of money rises to a certain maximum limit.

3. In the case of the premium renewal, the premium discounts are offered from up to 5 to 10 percent.

4. No bonus claim reduces by a certain amount if a claim is made. You may use No Claim Bonus in the claim year.

5. You can transfer your No Claim Bonus in case of a change or shift in new insurance policies. It means any coverages achieved so far are portable.

Benefits of a No Claim Bonus

Receiving No Claim Bonus is beneficial in many ways.

1. Any sort of health, car, etc. you hold provides you with No Claim Bonus benefits if you do not claim any coverage in a particular year, receiving it the following year. In a joint policy, if no member makes a claim, they all will be eligible to receive it the next year.

2. At this age of increased and rising inflation, receiving No Claim Bonus is considered a lifeline to save you from expensive expenses.

How does No Claim Bonus function?

1. It is often that a majority of policyholders skip claiming insurance some or the other year. Because sometimes due to affordable bills, the insured person often ends up paying from pocket. This makes you eligible for a No Claim Bonus the next year during your claim. Each year that goes without a claim your insurance company pays you up to a maximum of 50 percent. That’s how the total sum of your expenses increases.

2. Generally, once you claim your car, health or other insurance, and your company has paid you out, your No Claim Bonus is reduced to a certain amount. If you claim several insurances in one year, you may lose your discount.

3. In case of policy lapse or if you have not renewed the plan, No Claim Bonus revenue would not be allowed.

Conclusion

During this age of rising inflation, prices of all things are skyrocketing. In these conditions, having a No Claim Bonus works as a saviour to help you and boost your insurance coverage. Several cashless providers cover both pre and post-annual expenses and offer premium discounts on No Claim Bonus to keep you monetarily boosted throughout the year.

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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