What is a `No-claim’ bonus?
No-claim bonus (NCB) is a discount in premium offered by insurance companies if a vehicle-owner has not made a single claim during the term of the motor insurance policy. The discount, which is on ‘own damage’ cover, ie, cover against damage to the vehicle, can go as high as 50% for both 2-wheelers as well as 4-wheelers.
How much NCB can you enjoy?
This discount in the premium is usually 20% for the second year, 25% for the third year, 35% for the fourth year, 45% for the fifth year and 50% for the sixth year. The value of the discount depends upon the insurance claims you have made in that particular year. NCB can be carried forward and will be only allowed provided the policy is renewed within 90 days of the expiry date of the previous policy.
What if you sell your car?
The no-claim bonus is a reward to the vehicle owner for prudent use of the vehicle. If you sell a 10-year old hatchback and purchase a C-segment car, the no-claim bonus will pass on to the new vehicle and you can save considerably on your insurance costs.
Can you get the NCB transferred to another insurance company?
Yes, subject to evidence in the form of a renewal notice or letter, confirming the NCB entitlement from the previous insurer.
What should you do if you renew the policy online?
You have to scan and send the cover note to the insurance company online and it will do the needful.
What if you hide your claim history and avail of a no-claim bonus from a new insurance company?
Initially, you might succeed in getting a no-claim bonus by hiding your claims history. But insurers are sharing their claims databases and any false declaration will surely be detected.
Article - No-claim Bonus (NCB)
