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All About No Claim Bonus For Motor Insurance In India

What is No Claim Bonus?

No claims bonus (NCB), signifies the time period/number of years in which the policyholder hasn’t made an insurance claim on his/her car insurance policy. Though the worth of NCB varies from one insurance company to another, but the more number NCBs for years, the more the discount on the policy’s premium.

Does my NCB get affected if I make an insurance claim?

Yes, it does. When you make a claim on your car insurance policy, and the insurer settles the claim by paying out, then you end up losing at least some or all of your no claim bonus. But in case, your car has been hit by another car (leading to a damage to your car) without any fault of yours, then your insurance company might be able to get the payout from the other car’s insurer. In that case, your NCB will not be affected. There are times when one can’t decide whose fault it was, and both the parties’ insurers split the cost of the claim. In this case, the NCB for both the policyholders/drivers will be affected.

Is there a way to build my No Claim Bonus?

For each year, of being insured, if you do not make a claim, you are entitled to earn NCB for that year. So, the more number of years you go without making an insurance claim, the more NCB you build. Some reputed insurance companies offer accelerated policies. These policies enable you to earn a bonus in just 10 months rather than 12 months/ a year. A policyholder can build unlimited amount of NCB, but usually most insurance companies take into consideration a maximum of five years when calculating a discount.

Is my NCB still valid if I transfer my car insurance policy from one company to another?

In most cases, policyholders can transfer their accumulated NCB, from the previous insurer, to the new insurer while changing the insurance company. But if you change your insurer before a year is over, then you are not entitled to get an NCB. Make sure that you take a proof of your NCB from your previous insurer and pass it on to your new insurance when you transfer your policy.

How and why should I protect my NCB?

Yes, you should definitely protect your NCB. On doing the same, you get the leeway to have two “at fault” accidents, without letting the bonus be affected. So, despite having an accident, your NCB remains unaffected irrespective of the insurance company’s ability in claiming their costs back. As your insurance company makes use of your claims history to calculate your payable premium, the aforementioned scenario doesn’t essentially stop your premium from going up after a claim.

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