The No Claim Bonus or NCB is a discount on the premium you pay when you renew your motor insurance policy. This NCB increases with each insured year that passes without you raising a claim. The discount increases steadily from 20% to 50% over the course of five years. Insurance companies offer NCB to policyholders to promote safe driving. You can even retain your NCB if you switch between insurance providers. To help you get a better idea, let’s have a quick look at how NCB is calculated.
How to Calculate No Claim Bonus?
Here is the table showing the percentage of discount you can enjoy in the form of NCB:
|Years without raising an insurance claim||NCB applicable|
|3 years||35%||4 years||45%||5 years||50%|
It is important to note that NCB can only be applied to the premiums you pay after successfully completing one year without filing a claim. Furthermore, the NCB is only accumulated if the number of years during which you do not raise a claim are consecutive.
Example of NCB Calculation
Here is an example for better understanding. If you bought a vehicle insurance policy in 2021 and did not raise any claims for an entire year until 2022, then you qualify for a 20% discount on your insurance premium when you renew coverage in 2022. If you continue till 2023, without raising any claims, your discount keeps increasing as shown in the table above.
NCB Protect Add–On
To protect yourself from losing your NCB, you can get an NCB protect add–on. However, do keep in mind that purchasing the NCB protect rider will result in a slight increase of your insurance premium amount. With this rider, you can retain your bonus even if you make a certain number of claims up to the limit set by the insurer.
Things to Keep in Mind
The NCB is applicable only on the own damage section in a comprehensive car insurance policy. You do not get the benefits of NCB if you buy a third–party vehicle insurance policy.
If you wish to use the NCB to decrease your car insurance premiums, make sure to renew your policy on time as this benefit is only valid if your policy has been renewed before expiry or within the grace period. Also, if you are changing your vehicle, do remember to get the applicable NCB transferred from your previous vehicle to your new vehicle by asking your insurer to issue an NCB certificate.
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Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.