Everyone who owns a car must have a car insurance policy. The policy, depending on its coverage, helps the insured if there is any mishap like accident or theft. While calculating the premium for the policy, there are several factors that come into play. One of the main factors is the no claim bonus.
A no claim bonus is a reward given to the insured by the insurer in the form of a discount for not making a claim in the previous policy year. The percentage of discount that the insurance companies offer depends on the number of years in a row in which no claim has been made. Some of the things you need to know about a no claim bonus are:
Bonus is only available at the time of renewal of policy
When you buy a new car insurance policy, you are not eligible to get a no claim bonus. The bonus is a discount which varies depending on the number of consecutive claim free years. The discount ranges from 20-50% on the premium due at the time of the renewal of the policy. The no claim bonus rate however remains the same for all the insurance companies. Let’s have a look at the NCB rate grid:
|After one claim-free year||20%|
|After two consecutive claim-free years||25%|
|After three consecutive claim-free years||35%|
|After four consecutive claim-free years||45%|
|After five consecutive claim-free years||50%|
Do Not Claim Small Amounts from Insurance Companies
As the no claim bonus is a discount which you get for every no claim year, if you ask for a small claim, you end up losing the bonus. Thus, it is important that you carefully think before making a claim. You should compare the benefit of no claim bonus versus the amount that you are claiming. It would be wise enough if you shell out money from your own pocket to save on this reward given by the insurance company.
No Claim Bonus is for Personal and Not for Car
The no claim bonus is given to the insured. If you buy a new car after using the old one for 5 years, you are still eligible to get the no claim bonus.
Change of Insurance Companies
You are eligible for a no claim bonus even if you change your policy from one insurance company to the other.
Own Damage Premium
The no claim bonus is only applicable on the own damage component of the policy and not on thethird-party liability. Thus, the insurance policies which only have a third-party liability coverage are not eligible for a no claim bonus.
Person to Person Transfer
The no claim bonus cannot be transferred from one person to the other. The individual who is also the legal heir (the one who has inherited the car) would be the only exception. In this case as the ownership of the car gets transferred, the policy and the no claim bonus gets transferred too. At the time of the policy renewal, the legal heir is free to choose the insurance company and can still take the benefit of no claim bonus.
Transferring the No Claim Bonus
When you are selling your old car, and buying a new car, there is a simple procedure that needs to be followed to transfer the no claim bonus. Along with a letter requesting to transfer the no claim bonus, form no 29 and 30 needs to be submitted. After this a no claim bonus certificate will be issued by the insurer and this has a validity of three years and should be submitted to the new insurer.
If you are planning to change the insurance company at the time of renewal of the policy, you will only need to submit the policy copy of the previous year. While buying the policy online, the no claim bonus is calculated as per the declaration filled by the insured though the insurance company will verify the same and thus submitting wrong information is not an option.
Protection of No Claim Bonus
There is an add on cover named as the No claim bonus protector available which helps in the retention of the no claim bonus even in the event of registering a claim.You would have to additionally shell out some amount along with your premium to avail this facility.
A no claim bonus can help you get good discounts and save a lot of money on insurance premium. One should be careful while registering a claim with the insurance company and decide if it makes sense to the take the amount or let go of the no claim bonus.