How to Use the No Claim Bonus in Car Insurance to Your Benefit?
Most people hesitate in buying an insurance plan for their vehicle due to the premium payable. They might also think of it to be a waste of money and so end up buying a cheap car insurance policy, only because it is mandatory by law to have one. These people maybe are not aware of the term No Claim Bonus (NCB) and how it benefits at the time of policy renewal. This way, you don’t even have to worry about paying more premiums every year. Let’s get into the detail of the same and learn how that is possible.
What is no claim bonus?
You must wonder, what if I do not raise a single claim during the policy term, will my car insurance policy go to waste? The answer is no, safe driving can never go to waste. Making no claims means that you’re a safe driver, and so your insurance provider will offer you a concession on the premium amount the next time you renew your policy.
In case you do not make a single claim for five consecutive years, you will receive a concession of about 50% on the premium when you next renew your policy. However, remember that even a single claim can lead to losing the accumulated NCB, bringing it back to zero. Therefore, it is suggested that do not raise claims for small damages such as a minor dent or scratch. You can take care of these minor damages yourself too, by paying from your pocket. Therefore, think twice before making a claim and use your NCB wisely.
Benefits of No Claim Bonus
- Helps cut down on premium
To save on the premium price during car insurance renewal, you must earn No Claim Bonus.
- NCB is like a reward
No Claim Bonus is kind of a reward that you earn because you’ve been driving well without having to meet any accidents whatsoever. Hence, your insurance company offers you this concession so you keep up with the safe driving. However, accidents are unpredictable and so it is wise to save your insurance policy for making big claims rather than smaller ones.
- You can transfer NCB
If you’re worried about losing your NCB once you buy a new car, then you should know that your NCB is transferrable. You receive an NCB certificate from your insurance provider that is valid for some 3 years from the date when it was issued. This is a reward that you receive and so it belongs to you, not your vehicle. However, make sure to renew your policy annually, or at least in the grace period of 30 days. If you don’t do so, you will lose on your accumulated NCB.
Note that you can only claim up to 50% NCB, once the slab has been attained, you won’t receive any more concessions. And once you’ve made a claim, your NCB will turn to zero. Therefore, No Claim Bonus is great for your car as it helps in reducing the car insurance premium significantly. However, one must be careful while selecting a plan and choose the one that offers you maximum NCB.
The NCB factor sure motivates one to drive safely, so they don’t have to make big claims and can save on their renewal premium costs. Another smart way to reduce premium costs is by calculating the premium amount beforehand using the car insurance calculator available online on your preferred insurer’s website. Once you know the approximate value to be paid, you can make alterations as per your budget.