Car insurance NCB- Important things every car owner must know

You will often hear people say that car insurance is a must only for bad drivers. That someone who drives well and carefully doesn’t get anything from their insurance. But did you know that your insurance provider rewards you for driving well and not making any claims in a policy year? It’s called a No Claim Bonus (NCB). NCB is essentially a discount on your insurance premium that you can avail when you renew your policy. If you do not make any claims for a few years consecutively, you can accumulate up to 50% discount on premiums! Now isn’t that amazing? Here are some other important things you must know about NCB.

What’s interesting to note is that NCB belongs to the owner of the car, and not to the car itself. So, if you’ve earned NCB discounts on your existing car, and you decide to buy another car, you can transfer the benefits to the new car.

However, note that NCB is not transferred to one person from another unless the owner of the car passes away and the car is passed on to the heir.

The maximum NCB discount offered by insurance providers stands at 50%, which you earn by the end of five years of making no claims. If you’ve already earned the 50% discount, you will not be applicable to earn further discounts even if you cross another no-claim year but it continues to stay so. Here’s how your NCB progresses:

NCB discount isn’t applicable for third-party car insurance premium, which is the basic cover that is mandatory by law. Usually, third-party liability insurance premium accounts for up to 20% of the total premium amount. So, the earned NCB percentage will be calculated on the total premium minus the third-party liability premium. Understanding this is important, as car owners often wonder if there’s a calculation error as they usually calculate the NCB on the total premium and feel they have received an insufficient discount.

Even if you have no malicious intentions, and you mindlessly write any number for NCB when switching your insurance policies, the consequences could be grave. In case of an incorrect declaration of your NCB, your insurance provider could reject your car insurance claim altogether. That means that if you declare the wrong NCB while getting insurance, it's as good as having no cover. If you are switching your car insurance policy, make sure you declare if you have made a claim with your previous insurer in that year. This data is easily sourced by insurance companies and while you may get the policy, you will face a problem when it's time to make a claim, so there's no point hiding it.

Conclusion #1:

As any driver (good and otherwise) will tell you, driving isn’t just about being careful yourself- but protecting yourself from others’ too. The NCB Protection Cover can help ensure you get the reward for being careful, even if someone else was not. So, #ThinkAhead and drive safe.

Conclusion #2:

While being careful on the road has many more benefits for you, your insurer sure does appreciate it. But you can’t control everything on the road and sometimes making a claim is just inevitable. So, #ThinkAhead and get the NCB Protection add-on and drive with peace of mind.