As per the Motor Vehicle Act of 1988, vehicle insurance is mandatory in order to be fit for driving on Indian roads.
No Claim Bonus or NCB can generally be defined as a privilege granted by an insurance company to its comprehensive insurance customers. This is the discount bonus you get when you renew your comprehensive insurance. As its name suggests, the NCB privilege is applicable only in cases where the subscriber has not claimed his insurance in the year for which the insurance was valid.
Since NCB is completely dependent on the value of the insurance premium, insurance companies calculate it as a percentage of the insurance premium amount. Also, the NCB percentage increases as your number of claim-free years increases. At the end of the first claim-free year, the NCB on the next insurance premium is 20%. For your next consecutive claim-free year, the NCB increases to 25%. For the third and fourth consecutive claim-free years, NCBs attract 35% and 45% respectively. For your fifth consecutive year without any claims, the insurance company offers an NCB of 50%, which is the highest NCB you can expect from your insurance policy. It is to be noted that in order to retain this 50% NCB you must maintain claim-free years thereafter. Any claim in these years will void your NCB and the cycle will repeat itself.
This type of arrangement has been made to encourage the insured to save money of the insurance company by not claiming insurance year after year. It is to be noted that the No Claim Bonus is given only if you renew your insurance policy within 90 days of the expiry of your previous insurance policy. Unlike your vehicle insurance, NCB does not belong to the vehicle but to its owner. When you sell your vehicle, your NCB does not go with the vehicle or ends up with a certain company when you switch your insurance, but remains with you and can be transferred to your new vehicle and insurance policy. could. Thus, as a used vehicle buyer, you do not get any additional NCB when you transfer the insurance of your vehicle.
photo credit: www.myinsuranceclub.com
In recent times, many insurance companies have started offering add-on NCB protection covers that let you claim your insurance. Some insurance companies provide this cover up to a certain claim amount while some provide this cover for your first claim.
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It should also be noted that the No Claim Bonus is applicable only if your vehicle is covered by a comprehensive insurance. You do not get any NCB on third party insurance or collision insurance of your vehicle.
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