How to Use NCB to Reduce Car Insurance Premium

NCB, or No Claim Bonus, is the bonus a policyholder receives as a discount for not making any claims during the policy term. Therefore, if a policyholder does not claim any damages during a policy tenure, they will receive a discount in the next tenure. The discount can range between 20 and 50%, depending on other relevant factors. The reason behind offering such discounts is to motivate the policyholders to act wisely with their vehicles, significantly reducing the number of claims made.

Using NCB For Lower Premiums

While the main motive of insurance companies behind such a discount is to reduce the amount they have to pay in claims, NCBs have proven to be great for policyholders. They are a great tool that adds to the already crucial financial tool, i.e., insurance. If you want to explore this amazing feature more, here is what you can do:

Avoiding Making A Claim When Possible

While it is possible to make a claim when damages arise, it is better to pay it out of pocket and not raise a claim if the damage is not severe. This way, you can pass the tenure without raising a claim that makes you eligible for the NCB. However, this does not mean you do not raise a claim. If the damage is severe or getting repaired without informing the insurance company breaches any term or condition of the motor insurance policy, one must raise a claim.

Accumulate the NCB

You can accumulate tenure over the years when you have tenure, which is eligible for NCB. Generally, accumulating NCB over the years results in better and higher discounts when a considerable amount of time has passed. Usually, the NCB discount can be as high as 50% after five years. Though non-accumulation is still a good deal, as you still get your discount when due, accumulation multiplies the benefits.

Transfer NCB

If you have accumulated NCB on your old car but are planning to buy a new one, you do not have to worry about your accumulated NCB collapsing. Most insurance companies offer the option to transfer your motor insurance policy from your old car to your new car. When your policy gets transferred, the NCB earned on that policy also gets transferred. If you feel unsure how things will work out, contact your insurance company or the agent. Express your doubts and your desired outcome, and they will ensure the whole process is flawlessly completed.

Better With Old Cars

One great way to accumulate NCB on cars is to do it while you have an old car. When maintained regularly, older cars do not incur much expense. Therefore, it is easier to accumulate NCB on old cars. It is especially beneficial if you plan to buy a new car. The premium costs for a new car are comparatively high. And if the car is a high-cost luxury car, the premiums will be higher. However, with the accumulated NCB, these high costs can be reduced significantly, making the premiums more affordable. So, if you are planning to buy a new car, time it accordingly to maximise your NCB benefits.

FAQs

• How long is NCB valid if I don't renew my policy immediately?

NCB usually remains valid for up to 90 days from the policy expiration date, after which it may lapse if not renewed.

• Can I use NCB if I switch my insurance company?

You can transfer your accumulated NCB to a new insurer by providing the required proof of your previous insurance history.

• Does NCB apply to third-party motor insurance policies?

No, NCB only applies to comprehensive motor insurance policies and not third-party-only plans.

• What happens to my NCB if my car is stolen?

If you claim insurance for a stolen car, you typically lose the accumulated NCB, as it counts as a claim under the policy.

• Can I protect my NCB even after making a claim?

By purchasing an NCB protection add-on cover, you can retain your NCB benefits even after making one or more claims.