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Insurance Article

No Claim Bonus - A Quick Overview

July 15 2015
 Banff National Park 


Levels/
Age of Policy

No Claim Discount

5

50%

4

45%

3

35%

2

25%

1

20%

0

00%

IRDAI norms for NCB

 

It is mandatory for car owners in India to buy motor insurance that takes care of third party damages. However, a policy that takes care of own damages becomes a necessity. These package policies are expensive, but the no claim bonus feature offers attractive discounts on the premiums.

What is a No Claim Bonus?

A no claim bonus (NCB) is much like a reward for prudent use of the vehicle and adhering to the rules of the road. It allows the insured a discount on the premiums if no claims are drawn from the insurance policy. This discount increases every year, provided, the claim has not been made yet. In other words, the safer you drive, the less you will have to pay in premiums!

However, this discount is applicable only on the Own Damage premium, and not on Liability premium.

What are the NCB discount rates?

The no claim bonus feature gets you discounts in the premium ranging from 20% - 50%. However, the discount rates are dependent on the age of the policy and when the last claim was made.

Can the No Claim Bonus be waived?

Yes, the no claim bonus can be waived on the following occasions:

1. If a claim has been made
Any claim made from the policy resets the bonus to zero. This is followed, regardless of the size of the claim, or even if the claim was made because of theft of the vehicle.

2. Expiry of policy
The no claim bonus will be cancelled if the policy has been expired for a span of over 90 days.

Can the NCB be protected?

Regardless of when you make the claim or how big it is, the NCB will be reset to zero if you make any claim at all. In order to ensure that the bonus is not waived after small claims, the NCB protect add on can be bought. By paying for the add on, making small claims will not affect the bonus at all. However, these claims should stay within the predetermined limit.

Can the NCB be shifted to other motor insurance policies?

In case you want to change your insurance company, the no claim bonus can be shifted to the new motor insurance policy you buy. However, you should produce sufficient proof of the NCB of your previous policy and ensure that no claims were made. The no claim bonus can also be transferred from vehicle to vehicle.

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