NCB in Car Insurance Policy
NCB refers to ‘No Claim Bonus’. No Claim Bonus is represented in percent (%). It is a discount offered by the insurance company upon renewal for, not making any claim on the insurance. If you drive safely, then at the time, when you renew your policy, the insurance company gives the “No Claim Bonus” discount as a reward on your premium for being a safe driver.
Let us assume that if you purchase a car for the first-time, then you do not get any discount at that time. However, the insurance firm gives a discount of 20% on your first time renewal after the first year’s completion. But, it is given on a condition that you must not have any claim. This discount raises, up to 5% during the second year, another 10% during the third year, another 10% during the fourth year and finally, it reaches up to 50% during the fifth year.
Therefore, if you have not had any claim for 5 successive years, you can acquire a maximum of 50% discount. And, you will get this discount on the premium paid for the own car damage but not for the third party liability part. You have to renew the policy in an appropriate manner, i.e., within 90 days of your current policy expiration, to get this bonus. Moreover, if you get involved in an accident and make an insurance claim, the NCB percent reaches 0%, the very next year. Finally, if you make a claim, then, you will not be given any discount. After that, you require to start earning from zero again.
The significant fact is that your NCB percent for one car is transferable to another car. Let us illustrate it through an example, if your car has become 10 years old and that you would like to sell your old car and purchase a brand new car, then, you can apply the NCB% that you may have on your old car insurance policy onto your brand new car.
Furthermore, NCB percent is also transferable amid insurance companies. Accordingly, if you have 35% No Claim Bonus in your existing insurance company, you can acquire the similar percent of discount from another insurance company. It is also applicable, if you decide to change your insurance firm. Check the NCB percent mentioned in your car-insurance policy’s document today, and apply your possible efforts towards making it upto 50%.