We all love getting discounts on products and services. A discount does feel good, almost like a well-deserved reward. Did you know that you can get a discount on your car insurance too? This discount is called the ‘no claim bonus’ or NCB. The NCB is given to you by the insurer as a percentage of reduction on your insurance premium if you do not make any claim during the insured year. It is important to understand the NCB calculation in motor insurance if you wish to save money on your premiums.
To get a better understanding of how NCB works, read on.
The no claim bonus is made available to you only after the successful completion of the insurance policy year. The discount that you get is pre-defined and gets applied to the premium that you will pay for insurance renewal after your running insurance term has expired. The insurance provider automatically adjusts your premium according to the NCB earned by you. The NCB calculation for car insurance keeps increasing - up to a maximum of 50% - after the completion of every consecutive year that passes without you making an insurance claim.
The NCB percentage is fixed and does not waver between insurance providers present in the market today. To help you understand NCB calculation in car insurance renewal, here is an example. If you get through one year of coverage without raising any insurance claim, you get to enjoy a 20% discount on the premium you pay when you renew your insurance policy. So, if your initial premium amount is Rs.1000, after the completion of one year that passes without you raising your claim, your premium reduces by 20%. Thus, you would only need to pay Rs.800 for the renewal of your insurance policy (provided you are taking the exact same coverage and insurance rates have not changed).
What are the different slabs of NCB?
The table below shows the different slabs of NCB calculation for car insurance -
|No. of consecutive years completed without raising a claim||Percentage of NCB accumulated|
|Completion of first year||20%|
|Completion of two years||25%|
|Completion of four years||45%|
|Completion of five years||50%|
Upon completion of the fifth year, the NCB does not increase and stays at 50%. Many insurance providers also offer an NCB calculator to help you with your car insurance no claim bonus calculation.
The NCB has a lot of benefits to offer. Let’s look at some of them -
Disclaimer: For more details on risk factors, terms & conditions please read sales brochure carefully before concluding a sale. *The discount amount will vary subject to vehicle specification and place of registration
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