India, Sept. 5 -- When buying a car, it is recommended to obtain car insurance (motor vehicle insurance); however, as per the Motor Vehicle Act, third-party car insurance is mandatory in India. The most interesting thing is that policyholders are provided with NCB (No Claim Bonus) benefits.

Every year, premiums for comprehensive insurance may change, and as a result, you receive increased premiums. This is where NCB in car insurance comes into the picture.

The NCB discount, provided to responsible drivers for not making any claim during the policy term, helps reduce their premium costs when they renew their insurance policy. So, let's understand everything about the No Claim Bonus in car insurance and how it works.

What is No Claim Bonus in Car Insurance?

No-claim bonus (NCB) is a benefit provided by insurance providers to their policyholders if they drive safely and do not register any claims during the policy tenure. No-claim bonus car insurance helps the insured person receive a discount on his/her premium when renewing his/her policy next year.

Now that you know 'what is NCB in car insurance?', let's understand how it works.

How Does NCB in Car Insurance Work?

NCB in car insurance works like a reward system designed to reward policyholders for being responsible drivers and not making a claim against their car insurance policy during the policy term.

Suppose your policy term is about to expire, and its renewal is required. Then, your insurance provider notices that you have been a responsible driver and have not filed any claim during your entire policy tenure. Therefore, you will be rewarded with an NCB benefit when you renew your car insurance policy for the next policy term.

With each claim-free year, the percentage of no claim bonus increases. A 20% discount is added during the policy renewal in the first no-claim year. Following this, you may receive up to 5-10% additional discount in your second claim-free year.

You may enjoy a 50% discount for up to 5 consecutive no-claim years. However, after 5 years, no discount will be rewarded for additional claim-free years.

Benefits of NCB in Car Insurance

Here are the key benefits of NCB in car insurance:

1. Affordable Premiums

NCB car insurance allows you to earn about a 20% to 50% discount on your car insurance policy premiums. The NCB discount is rewarded to policyholders on each claim-free year, helping reduce the cost of the premium at the time of renewal.

2. Positive Rewards

As mentioned above, NCB car insurance is a benefit provided to responsible drivers who have not made any claims during the policy term period.

3. Transferrable

If you are changing your insurance company or car, you can easily transfer your NCB. But ensure that you change your insurance policy before your existing one expires.

4. Offered Directly to Policyholders, Not Cars

It is essential to know that NCB in car insurance is offered to the policyholder, not the insured vehicle. If you want to sell your insured car, NCB will remain with you, not the car you sold. However, it cannot be transferred to a new owner.

How to Check NCB in Car Insurance?

While buying a car insurance policy, you can check the NCB by referring to the NCB slabs provided by your insurer.

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If you are renewing your car insurance policy online, check the applicable NCB on your insurance plan at the insurer's website.

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You will also get the NCB calculation provided in your policy document after you purchase the policy.

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In offline renewal, you can ask your insurance provider or agent about the applicable no-claim bonus before renewing the plan.

Final Words

NCB car insurance is a reward that your insurance company provides for being a responsible driver and not claiming against your insurance plan during the policy tenure. Also, you can enjoy up to a 50% discount on your insurance policy premium for five consecutive claim-free years. Thus, maintain a clean driving record and enjoy the low premium costs on your car insurance policy every year.



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