All you need to know about no claim bonus in car insurance

These days, every single one of us is being made aware of insurance and different insurance policies available on different items. Most people are well aware of the attractive benefits of having good, reliable, valid, and full-proof insurance policies. 

A lot of research and awareness goes into selecting a policy for safeguarding oneself and one’s family. The different types of insurance policies available are – health, life, car, property, mobile phone, electronics, etc. That is how holistic the packages of insurance are. 

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Ensure the insurance – When we end up purchasing something exclusive and expensive, we want to ensure that it will remain safe for a long time and any damage done to it will be covered with minimal cost. 

This need is also recognized by companies. For example, car companies have also started rolling out or coming into tie-ups with companies that would provide a good car insurance policy to their customers thus ensuring safety and security in times of mishaps. 

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Benefits for one and all – Accidents come unannounced and unexpectedly. They can cause severe harm to the individuals impacted. Damage to the car, the other vehicles, the people, all come at a great cost in emergencies like these, therefore, securing and covering the financial costs of these can be one matter of respite. 

However, insurance is not only necessary for those who are so-called ‘bad drivers’; it can also come in handy for those who are generally careful and safe. A question one might ask would be, “but won’t my insurance payments go to waste if I don’t ever end up redeeming it?” The answer would be – no. 

If an individual does not claim insurance money in the years of the contract, it can actually prove to be advantageous for them as they get a huge discount during the renewal of the policy. This benefit is called a “no claim bonus”.

An NCB in car insurance can almost get us a 50% discount while upgrading their package depending on the number of years a claim has not been availed. 

It is like a reward that the companies offer to their customers in case there has been no redeeming of their claims for a few consecutive years or as the policy states. How awesome is that?!

Some important things to keep in mind about NCB in car insurance are:

• The discount policy can only be availed during the renewal of the insurance – A discount that can go up to 50% on premium payables is earned when the holder does not make any claims (no-claim) during the previous years. The percentage increases as the years of no claims increase starting with 20% in the first year. The maximum discount that can be availed is 50% at the end of 5 years without claims.
• The NCB remains unhindered even if the car is changed – One of the most advantageous features of this policy is that it belongs to the person, not the vehicle. This means that even if one buys a new car, their NCB policy will remain intact – it is transferrable.
• Small claims can lead to bigger losses – Spending money on repairing the damages on cars can get expensive. Therefore, it is supremely tempting to avail of the insurance policies even in case of small damages. However, it would be prudent to do so as even if one redeems their insurance for minimal coverage, the NCB value turns to zero. Experts suggest carrying out a cost-benefit analysis especially in cases of lesser damage thus maintaining the value of the NCB.
• An NCB is terminated when a claim has been made in the existing policy year and also if the policy has not been renewed within 90 days from the date of expiration.

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An NCB provides a security blanket for safe drivers as well. In fact, most individuals can also look at this policy as a motivation to drive better while following all the rules and regulations to be able to redeem this amazing policy in all its glory. 

Even in cases of unfortunate accidents or the good years where there have been none, insurance can be favorable either way. Hurry up and get your cars insured at the earliest to be able to make the most out of the benefits that come along with it.

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