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What You Need to Know About No Claim Bonus in Vehicle Insurance

According to the 1988 Motor Vehicle Act, car insurance coverage is necessary for it to be match for driving on Indian roads.

No Claim Bonus or NCB can sometimes be outlined because the privilege given by the insurance coverage firm to their complete insurance coverage prospects. It is the low cost bonus you get once you renew your complete insurance coverage. As its identify suggests, the NCB privilege is relevant solely in instances the place the client has not claimed their insurance coverage in the yr for which the insurance coverage was legitimate.


Since NCB depends on the worth of insurance coverage premium solely, insurance coverage corporations compute it as a share of the insurance coverage premium quantity. Apart from this, the NCB share will increase when your variety of claim-free years go up. At the tip of the primary claim-free yr, the NCB on subsequent insurance coverage premium is 20%. For your subsequent consecutive claim-free yr, NCB will increase to 25%. Third and fourth consecutive claim-free years entice 35% and 45% NCB respectively. For your fifth consecutive yr with none declare, the insurance coverage firm affords an NCB of fifty%, which is the very best NCB you possibly can count on out of your insurance coverage coverage. It should be famous that you should keep claim-free years hereafter to keep this 50% NCB. Any declare in these years will get your NCB to zero and the cycle will repeat itself.


This sort of association is in place to incentivize the insurance coverage holder for saving insurance coverage firm’s cash by not claiming insurance coverage yr after yr. It should be famous that No Claim Bonus is obtainable solely once you renew your insurance coverage coverage withing 90 days of expiry of your earlier insurance coverage coverage. Unlike your vehicular insurance coverage, NCB doesn’t belong to the car however its proprietor. When you promote your car, your NCB doesn’t go away with the car or finish with a sure firm once you swap your insurance coverage however stays with you and will be transferred to your new car and insurance coverage coverage. Thus, as a used car purchaser, you don’t get any added NCB once you switch the insurance coverage of your car.


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In latest instances, many insurance coverage corporations have began giving add-on NCB defend covers which allow you to declare your insurance coverage. Some insurance coverage corporations present this cowl upto a sure declare quantity whereas some present this insurance coverage cowl on your first declare.


It should even be famous that No Claim Bonus is relevant provided that your car is roofed by a complete insurance coverage. You don’t get any NCB in your car’s third social gathering insurance coverage or collision insurance coverage.

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