Car insurance has become a mandatory thing in India as per the Motor Vehicles Act introduced by the government. As per the set rule, every car owner should insure his/her car with at least a third-party liability cover. Now, No Claim Bonus is one of the discounts offered by the insurers today in India. A No Claim Bonus is a discount offered by the insurer to the policyholder for every claim-free year. Having NCBs offers levy on the insurance premium you have to pay when you renew your policy. Hence, preserving accumulated NCBs is vital as it helps you save on your car insurance.
NCBs is offered to the policyholder for his good driving record every year and is not linked to the vehicle. So, in case you have accumulated NCBs and wish to buy a new car, you can transfer the NCBs to your new insurance policy if it is taken under your name.
The insurers offer No Claim Bonuses as a way to motivate the policyholders to drive safe and maintain a good driving record. Also offering No Claim Bonuses will motivate the policyholder to refrain from from raising small claims.
The No Claims discount increases with every consecutive year, starting at 20% the first year, it can go upto a maximum of 50% in the fifth year.
The table given below reflects the percentage of No Claim Bonus Discount offered to the policyholder with each claim-free year.
|Claim-Free Interval||No Claim Bonus Discount|
|Above 5 years||As determined by the insurer|
The retention of your accumulated No Claim Bonuses will depend on the scenario you are in at the time.
In case you purchase a new car, your existing car insurance policy will not be automatically transferred to the new car. In order to transfer the insurance policy, you will have to raise a request your insurer to make the necessary changes to the policy and transfer the policy to the new car.
In case you purchase a new car insurance plan, you can transfer your accumulated NCBs to the new policy. If you are unable to transfer the NCBs immediately for some reason, you can request your insurer to issue a NCB preserve letter. This letter is a certificate that authorises you to preserve your accumulated NCB for a maximum of two years. It should be noted that you have to buy a vehicle belonging to the same class in order to retain the accumulated NCBs.
You can also avail a No Claim Bonus Protection Cover to save your accumulated bonuses at the time of raising a claim. This cover ensures that you don’t lose the No Claim Bonuses at the time of raising a claim.