With the car being old, the amount of insurance is increased. In such a case, to give some relief to car owners, insurance companies give 'no claim bonus' on the policy.


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With the car being old, the amount of insurance is increased. In such a case, to give some relief to car owners, insurance companies give 'no claim bonus' on the policy. What is this 'no claim bonus'? How does the insurer benefit from this? How much does this bonus get? Let's try to find answers to these questions. 'No Claim Bonus' (NCB) is called a discount, which the insurance company gives to the customer at the premium amount. The condition is that the car owner has not taken any kind of claim in the past year. This discount can be between 20 to 50 per cent.

How is Discount Discounted?

If the insurance value of a vehicle is Rs 4 lakh at the time of renewal, and its on-premise premium is Rs 12,000, then the customer will be given a 20% discount. In this way, instead of not claiming the claim, after paying a discount of Rs 24, Rs 9,600 will be repaid.

As the car is old, the rate of no claim bonus will also increase in insurance. However, this benefit is available only when you have not claimed. At the same time, you have to renew it before the expiry of the policy.

When do not get 'no claim bonus'?

  • If you have claimed a year, then next year you will not get NCB.
  • If the policy is not renewed within 90 days of expiry, you will not get NCB. Even if you have not taken the claim.
 Significantly, no claim bonus can be transferred from one vehicle to another, provided the policyholder's name is same. Apart from this, the insurance company also gets a no claim bonus on change. That means even if you do not take the claim even after changing the company, you get the NCB.

Policyholders should keep in mind that the NCB is available on the dame. This is not the benefit of a third party policy. In the premium, the third party has a stake of 15 to 20 per cent.

Avoid taking small amount of claim.

If you take a claim for minor damage, then know the price for its long term. Once your claim is received, your NCB score becomes zero, i.e. you will not get any rebate in the next year, and even after that, you have to create an NCB score from the beginning.

For example, Jagdish bought a car in 2013 and did not take any claims for four years. In the 2017 premium, he could save up to Rs 6,000 with 45 percent NCB, but he got a claim of 5,000 rupees if he broke the glass.

Because of this, not only was he deprived of a discount of Rs 6,000, but instead of taking a claim for the next year, he got 20 percent discount for 50 percent. Because of this, it is not prudent to claim a claim for small losses.

NCD security guards rider

However, some companies have come with a new rider, in which you can keep your NCB safe. In this rider you get a discount on the balance after your claim, but you will have to start again next year.

If you look at the example above, then you can get a buck of Rs 6,000, but he has a claim of 5,000 rupees. With this rider he could take the difference of this 1,000 in the NCB. However, he does not get 50 percent discount next year.

Sunset clause

Under the NCB, you can get a discount of a maximum of 50 per cent. Even if you have not received any claim after 50%, this limit will not increase.