Why is it important to ask for your no claim bonus

Many people wonder whether an insurance policy is necessary at all; particularly, when there have been no claims availed in several years. Part of it is that it is required by law. However, insurers not only understand this concern, but they have also put together a process to return a part of the premium on policies that have caused no loss to them. In motor insurance, such a reward is offered in the form of a No Claim Bonus (NCB) which is to be redeemed the year following the claim-free policy term. What’s more, your No Claim Bonus increases as the number of years without claims increase. However, should you make a claim, the following year counts as year one for the NCB.

More about No Claim Bonus:

No claim bonus can be availed by only those policy holders who have not claimed against car insurance in the past year(s). It gets accumulated over a period of time. In simple words, the NCB is a reward for being a good driver. NCB is transferable from one company to another but not from one person to another and it is therefore a portable benefit.

When does one lose NCB discount:

• If in case the customer lodges a claim, the NCB becomes zero and the customer needs to pay full premium when he renews the policy next year.
• NCB becomes zero if the policy renewal is done more than 90 days after the previous policy has expired.
• If you transfer your NCB credit to another vehicle that you own, the NCB enjoyed on the previous vehicle will come to an end.

Tips to extract the maximum benefit out of NCB:

• Always renew before the expiry date mentioned in the previous insurance policy.
• Try to forgo small claims. Small claims lead to higher premium. You need to analyse the cost of minor dents and repairs to be paid as against the amount of premium that you will have to pay extra, in case you choose to avail the NCB when you renew your insurance policy.
• NCB can be transferred from old vehicle to new vehicle within 3 years from the date of sale of the old vehicle (new vehicle should be of the same class as that of the sold car). This will keep your NCB discount going even though you have changed your vehicle.
• Always provide the correct percentage of NCB to the insurance provider; if the percentage of NCB is wrongly entered, then either the customer’s claim may get rejected or insurance policy may get cancelled later.

No claim bonus is earned by careful driving year after year. So drive safe and save on your car insurance premium.