People often say that car insurance is a must-have for bad and rash drivers, but someone who drives with precaution need not worry about one. Well, this isn’t the truth. Car insurance is an absolute necessity for all vehicle owners. The Motor Vehicles Act, 1988, further amended in 2019, makes it mandatory for every vehicle registered in the country to have a motor insurance policy.
But it isn’t always that you will file a claim for your four wheeler insurance. Then what happens if you don’t file a claim? Does your premium go to waste? No! The insurance company provides a no claim bonus facility (NCB). Read more to know about such lesser-known facts about no claim bonus in your motor insurance policy –
#1 You can transfer your NCB when you buy a new car
You will be surprised to know that NCB benefits belong to the policyholder and not the vehicle. So if you have not made any claims in previous policy tenure, you earn an NCB. Now if you wish to upgrade your car, you can transfer the no-claim benefits to this new car of yours. All you have to do is intimate your insurance company about this new car, and your insurer automatically adjusts the premium by the NCB concession. Although, you must be aware that such NCB is not transferred to another person unless the original policyholder passes away and the car is passed to its legal heir.
#2 You can earn maximum NCB benefits up to 50%
NCB benefits start at 20% and go up to 50% for every consecutive claim-free policy year. If you have not made an insurance claim for five or more years, you earn 50% renewal benefits in your premium. There is a capping of 50% of NCB in your car insurance renewal premium. However, one crucial point to note is that NCB benefits are applicable for comprehensive car insurance plans only. Third-party liability policies do not have an NCB facility.
#3 NCB benefits are not calculated on your entire premium amount.
As already discussed, NCB benefits aren’t applicable for liability-only policies which are the minimum requirement as per law. Since all comprehensive policies include third-party component, the NCB concession is calculated only on the own damage portion of your policy. Many people wonder if there is an error in the calculation as they tend to verify the concession on the entire amount of premium. It is crucial to remember this as you might feel your insurance company offers lesser benefits.
#4 You should not declare an incorrect NCB
When you switch between insurance companies, you must not declare an incorrect amount of no claim bonus. Even if you do not have any malicious intent, the consequences of falsifying can be grave. It may lead to rejection of your claim too. If you end up declaring an untrue amount of NCB, your insurance policy is equivalent to not having one. To avoid such confusion, you can ask your previous insurance company to provide an NCB certificate. This NCB certificate can be a supporting document that you can provide to your new insurer as well as use to mention on the application form.
While being careful in your driving has its benefit, your insurer rewards you with a no claim bonus. Since you cannot control those driving around you, it is always safe to buy an NCB protector cover. It lets you make a claim up to a specified number of times and carry forward your NCB benefits too. An online car insurance calculator can aid in the process of comparing and shortlisting various policies. Make the best of your car insurance and remember to drive safely at all times.
