Understanding The Meaning Of NCB And How It Helps To Lower Your Insurance Premiums

Insurance Premiums


When you acquire a car, it brings more than just convenience to your life. It comes with a lot of responsibility. In addition to appropriate vehicle maintenance, you must also ensure that your vehicle is covered by a legitimate auto insurance policy to get car insurance benefits.

The only way to lower your premium is to manage your own damage coverage. This is only possible if you understand the factors involved. No claim bonus is the best illustration of this when you get into how to renew car insurance.

1. What exactly is NCB?

NCB, or no claim bonus, is an add-on that allows an insurance company to compensate a policyholder for not filing any claims during the policy year. This award comes in the form of a premium concession for the following insurance year. After you renew your policy at the end of a claim-free year, NCB may offer you a reduction ranging from 20% to 50% of the entire premium. The NCB is applied to the premium amount at the time of renewal. Furthermore, this bonus is transferable, which means that it may be moved from an older vehicle to a newer one. *Standard T&C Apply

2. How does NCB function?

The no-claim bonus is only available beginning with the second year of the policy term. After the first year and no claims by phone, email, or a vehicle insurance app, your insurance company will provide you a 20% concession on the premium amount. This percentage rises the longer you go without filing a claim. You will begin getting benefits in the second year and will be able to grow up to a particular limit specified by the insurance provider. In most cases, the highest concession offered by insurance companies to their clients is 50% of the premium. This, however, is dependent on the insurance carrier.

The circumstances in which you would not get the benefits of the no claim bonus feature under the car insurance claim rules are as follows:

  1. If the NCB benefit is cancelled due to your request.
  2. You make an assertion.
  3. If the policy is not renewed within 90 days of its expiration.

If you have a no claim bonus, you can transfer the concession from one vehicle to another as long as the new vehicle is owned by the same person. Furthermore, if you decide to change insurance carriers, the NCB can be transferred to a new policy. If you are selling your vehicle and purchasing a new one, make sure the no claim benefit is transferred to the new vehicle. The insurance company will issue a certificate during the transfer process, and the premium may be lowered. This choice, however, may be at the discretion of the insurance company. You must always get the transfer document for the NCB benefit. The same is true if you change vehicle insurance companies.

Customers with third-party liability insurance will not be able to use the NCB benefit because it is an add-on. It is only available to persons who have standalone own damage insurance or comprehensive insurance policies.

The calculation of the no claim bonus deduction is predetermined and simple. To take advantage of the no-claim bonus and car insurance benefits, you must not file a claim during the policy year, whether through phone calls, emails, the website, or the app. If you file a claim for even minor damage to your vehicle, you will forfeit the no claim bonus concession. For minor repairs, it might be a good idea to avoid insurance claims and keep your NCB intact. However, for other claims, it is a good idea to make claims under your insurance policy. *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply

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Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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