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Raghuram bought an insurance policy for his car and he didn’t make any claim during the policy period. The insurance policy is about to expire in 10 days and needs to be renewed. So, he contacted his insurance company and the insurance company offered discount on the premium rate due to the no-claim bonus (NCB) benefit; resulting in him saving money.
Car owners should know the NCB full form to be able to gauge the importance. NCB means no-claim bonus awarded by insurance companies to car vehicle owners. When a policyholder doesn’t claim any amount in a policy year, then he/he is eligible to get an NCB reward in the form of discounts on premium rates while renewing a policy.
1. High savings
NCB enables a person to ensure high savings when he/she wants to renew his/her policy online. Not only that, if you continue to not making any claims for a longer time your overall savings can be quite substantial.
2. It is transferrable
NCB is mainly associated with the car owner and not the car. Hence, a policyholder can carry forward the same when he/she wants to sell his/her vehicle. It is possible to retain the NCB when porting a policy from one insurance company to another insurance company.
NCB allows policyholders to get high discounts on premium rates while renewing their policies online. It thereby helps to bring down the premium amount.
Car owners can transfer their NCB insurance to a new insurance policy during the renewal process. It depends on the buying mode that will help accomplish goals. For example, if a car owner buys an insurance plan offline or through an agent, then he/she can submit NCB by submitting his/her buyer-seller agreement. They should use Forms 29 and 30 along with a requisition letter to transfer NCB from the existing insurance company. The existing insurer will issue an NCB certificate and a car owner can submit the same to a new car insurance company as soon as possible.
On the other hand, there is no need to do anything while buying an insurance policy online. Car owners should mention their NCB, policy number, and the name of the insurer. The new insurance company will take care of everything and will manage the process with ease.
Car owners would need to submit certain documents when they want to transfer their NCB. Some of them include the NCB transfer application, copy of car insurance plan, sales agreement, and NCB certificate issued by the previous insurer. Anyone who recently purchased a new car should submit their booking receipt when they want to transfer NCB.
No claim bonus is applicable only at the time of the policy renewal process. Moreover, a car owner should have his/her own damage cover component in his/her car insurance plan. It is important to know more about how car insurance no claim bonus works for an informed decision. NCB is applicable only on a comprehensive car insurance policy and not on the third-party liability policy.
Policyholders can retain their NCB even after making a claim. To get this benefit, they should consider buying an add-on cover called “no-claim bonus protector”. This cover enables the car owner to make two claims in a policy year without losing his/her accumulated NCB.
An insurance company will calculate NCB from the second year onwards. It provides 20% discounts on the premium amount when a policyholder does not claim in the first year. The percentage will increase up to 5 consecutive years. It is therefore advised that policyholders learn more about NCB car insurance in detail.
NCB will get terminated when policyholders claim within a year. Those who don’t renew their policy within 90 days of the policy expiration may lose their NCB benefit. Hence, it is wise to renew a policy within the stipulated time to avoid unwanted problems.
Car owners should understand what is NCB protection in car insurance from experts to reap the claim discounts with ease. The maximum no claim bonus applicable on car insurance is up to 50% in the first consecutive year of no claim. For clarity, car owners can even use a no-claim bonus calculator online that will help them to find the approximate amount.
Those who want to buy the best car insurance plans should check whether an insurer offers a no-claim bonus feature to policyholders. They can compare the plans and features online for clarity. It is wise to choose a car protection plan that will reduce the high expenses caused by engine repairs and other things. If a person is buying a policy for the first time, then he/she should consult an insurance agent or maybe even peers to make the right decision. A car insurance policy must focus on safeguarding a vehicle from man-made mistakes, natural calamities, and other problems. It should satisfy the various parameters of car owners when they want to buy a new policy.
The bottom line
NCB is an excellent feature available for car owners and comes as a reward when they want to renew their policy at the best prices. However, it is necessary to abide by the car insurance NCB rules to gain maximum advantage. Most insurance companies offer NCB features for car owners as a reward for not making any claim within a policy year. One should read and understand the terms and conditions of insurance policies in detail while buying a plan online. For all motor insurance related asks, PayBima’s team assists in finding the right insurance for your needs, while keeping your priorities in mind.
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