NCB (No Claims Bonus): How your old car can reduce insurance premium of your new policy?
Driving Savings: Leveraging NCB for Discounts on Your New Car Insurance
NCB stands for No Claim Bonus. NCB in insurance is a bonus awarded to the car owners/policyholders when no claim is raised in a policy year. This means that if you raise no claim in a policy year, you will receive no claim bonus. The bonus keeps increasing every consecutive year when a claim is not raised. Read on to understand the NCB meaning and how you can make the most of it.
How can NCB benefit your new insurance policy?
If you have a car insurance policy, the purpose is to raise a claim when there is a need. However, if there was no accidental damage or you choose not to raise a claim against some minor damages, you will receive a no claim bonus benefit. You can use the NCB in insurance to get a discount on a new policy that you plan to purchase. Wondering how? Continue reading.
NCB accumulated in an old vehicle can be used to get discounts on a new car insurance policy or for a new car. Here is how you can use the NCB:
Purchasing a new car
If you are planning to purchase a new car after selling your existing car, you can keep the NCB intact and use it to get discounts on the new car. For instance, if you have an old car and have accumulated 35% NCB. Now, you plan to sell your vehicle and purchase a new car with a new comprehensive car insurance policy. For this, you need to obtain an NCB certificate from the insurer for your old car. Then, you may sell the car and transfer the policy to the new owner.
At the time of purchasing your new car and new car insurance policy, you can use the NCB certificate and get the eligible discount on the new car’s premium.
Purchasing a new policy
In case you wish to change your existing car insurance company, you can still retain your NCB. After you have purchased your new car, you need to obtain the NCB certificate from your existing car insurance company. Once you have the NCB certificate, you can use it to get discounts with your new car insurance company.
Note: Your NCB is valid up to 90 days from the date the insurance policy expires. Make sure you renew it before this otherwise, you will lose the entire acquired bonus.
How is NCB calculated?
The NCB rates are standardised by the IRDAI (Insurance Regulatory and Development Authority of India). Here is the table showing the same:
No Claim Year | Discounts |
1st year | 20% |
2nd year | 25% |
3rd year | 35% |
4th year | 45% |
5th year onwards | 50% |
Note: The maximum discount you can avail is 50%. If you do not make a claim even after 5 years, you can get up to a 50% discount on the upcoming premium.
How to protect NCB?
Once you raise a claim, you may lose the NCB accumulated so far; however, there are ways to protect NCB. If you invest in NCB protection add-on cover, you can protect NCB even after raising a few claims in a policy year.
Conclusion
No claim bonus can be quite helpful in getting exciting discounts. You have your NCB intact until you raise a claim (without NCB protection) or your policy gets terminated. Use NCB online to get discounts on your next policy year!
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