It is of vital importance that every car owner in India while purchasing a car, also shops for a suitable insurance policy to insure their vehicle. As a car owner, you need to have a third-party insurance at least. The Indian government has made it mandatory for every car owner to insure their car. They have incorporated this rule via the Motor Vehicles Act which needs to be religiously followed in India. Disobeying the law will result in heavy fines and/or other legal actions.
No Claim Bonus (NCB) is a discount offered by the insurer to the policyholder for every claim-free year during the policy period. Accumulating NCB provides the policyholder with the opportunity to buy/renew a car insurance for lesser premiums unless they raise a claim or the base policy expires. For the first claim-free year, the policyholder is eligible for a premium discount of 20%, for two continuous claim-free years, he/she eligible for 25% and so on.
The below table shows premium discounts based on the number of claim-free years
|Number of Consecutive Claim-free Years||Insurance Premium Discounts|
NCB also reflects the kind of driver you are, the more number of NCBs you have, the more will the insurers consider you as an experienced and good driver. This may also motivate them to reward you with additional perks
NCB Protect is a smart way to ensure that your hard earned bonuses stay protected even if you raise a claim. This protection is usually provided to you as a rider option for the base insurance policy. Among all the rider options available, this is one of the options people favour the most due to the fact that opting for NCB cover ensures low premiums for more than a year depending on the number of NCBs accumulated. So, from the second year onwards, you are eligible for low premiums. This way the policyholder saves money on the insurance premiums. NCB cover costs about 5% - 10% of your base policy and although the NCB cover may be a little costly, the accumulated NCB will give you the added advantage of saving a good sum of money.
Key points to remember when it comes to NCB: