No Claim Bonus or NCB is like a reward given to the vehicle owner given during the course of the motor insurance policy time. NCB is calculated during the renewal of an existing Motor Insurance policy. NCB is nothing but a discount or offer provided by your insurance company in the premium if the vehicle owner had not done a single claim during the term of the motor insurance policy. If the person has made a claim on his vehicle, then NCB will be 0. The same premium amount will remain in the next policy too. Usually, the first year discount rate is 20%. The consecutive year’s discount rates are 25%, 35%, 45%, and 50% respectively based on the consecutive non-claim years. The 50% maintains throughout if the person does not claim at all. So, NCB can be carried over the years, only if the insurance is renewed within 90 days of the expiry date of the previous policy.
Example for NCB
A person purchases a new car in 2015 and buys a Car Insurance for his/her car.
Case 1: If a person doesn’t make any claim in that year and while renewing that policy in the year 2016, the person will get 20% NCB on the premium amount. And again if no claim has made, 25% NCB will be given to the person while in 2017 while renewing and this goes on for the next consecutive years.
Case 2: If the person has made a claim in 2015. While renewing the policy in 2016, 0% NCB is given since the policyholder made a claim. In this policy, if the person doesn’t make a claim, he/she will receive 20% NCB in 2017, while renewing.
If a person sells his/her few years old car and purchases a brand new car. The No-Claim Bonus passes on to the new car which ultimately saves up your insurance cost. It can also be transferred to other insurance company if the righteous renewal notice of NCB is given as evidence to them from the previous insurance company. The discount rate of the NCB changes yearly.
NCB protection add-on:
NCB protection is an Add-on that can be selected additionally in motor Insurance which cost some amount. This add-on protects our NCB. In the above-mentioned case 2, if the person has chosen this add-on, the NCB will be protected for the next year even if the person has made a claim. So gets an NCB discount while renewing. Anyways, the policyholder has to choose the add-on wisely.
