Once you own a car, purchasing car insurance becomes mandatory. Car insurance offers financial coverage benefits that protect you during unforeseen tragedies. However, to avail those features, you must carefully understand and follow certain terms and conditions regarding the features.
One such special feature that car insurance offers is the “No Claim Bonus,” or NCB.
Read through to know more about what is NCB in car insurance and information related to how to check NCB in car insurance.
What is No Claim Bonus in Car Insurance?
No Claim Bonus is a feature where the insurance provider gives a discount (as a reward) to the policy holder during the time of renewal of their car insurance online for not filing any claim during the policy year.
It is like an encouragement for the drivers for their safe, and accountable driving.
Importance of Adhering to Terms in NCB Car Insurance
To make the most benefit from NCB and not lose the perk of it, you must adhere to your insurance provider’s terms and conditions.
Financial Savings
While renewing your car insurance policy, the most significant benefit of NCB is the discount on the premium costs. This discount of NCB percentage in car insurance increases for each consecutive claim-free year.
For example, a policyholder decides to get their insurance from a credible insurer like TATA AIG- is eligible for a 20% discount after completing one year without any claims. This discount rises to 50% after 5 consecutive years without making any claims. The longer you go without claiming, the higher the NCB percentage in car insurance you get as a bonus.
Encouragement for Safe Driving
The framework of NCB is articulated to reward responsible driving behaviour. Knowing that making a claim would jeopardise its future discount the driver avoids minor claims and manages small repairs out of their pocket.
This mindset not only encourages prudent financial decisions but also fosters a culture of safety on the roads, as drivers become more vigilant behind the wheel.
Transferability
The No Claim Bonus in car insurance is associated with the policyholder rather than the vehicle itself. This implies that NCB is linked to the car owner, and remains with them regardless of the car they drive.
As a result, the benefits of the NCB are not limited to the current vehicle or insurance provider. Instead, it serves as a record maintained by the car owner that can be transferred to a new vehicle or even when switching insurance providers.
Risks of Neglecting NCB Terms
Forfeiture Upon Claim
If a claim is made during the policy year, the accumulated No Claim Bonus (NCB) is completely forfeited, resulting in a reset of all discounts for future car insurance policy renewals.
This means that any benefits accrued from maintaining a claim-free record will be lost, and the policyholder will need to start from zero when it comes to earning discounts on their premiums.
Renewal Timeliness
To retain your NCB benefits, it is essential to renew your insurance policy within 90 days of its expiration. If you miss this window, you risk losing your accumulated NCB percentage in car insurance.
Understanding Policy Exclusions
It is extremely crucial for a car owner to understand all the exclusions and barriers to the coverage of their insurance for four-wheelers. Overlooking any specific terms could lead to the loss of your No Claim Bonus. The restrictions on the sorts of maintenance, and usage provider facilities can also result in NCB cancellation. Therefore, always take the time to read and comprehend the specific terms and conditions of your policy thoroughly.
Preventing Fraud and Abuse
Always provide correct information and accurate documents to the insurer. Failing to do so may invite unnecessary complications or the loss of your No Claim Bonus (NCB). In extreme cases, fraudulent claims could result in legal repercussions.
Conclusion
All in all, the advantages of the NCB depend on the policyholder’s compliance with the terms and conditions of their auto insurance for a four-wheeler policy. Overlooking these terms can lead to the loss of NCB benefits.
To fully leverage the benefits of the NCB and ensure a smooth claims process, policyholders should remain proactive.
Safe Driving!
