Did you know you can lower premium on your auto insurance with No Claim Bonus (NCB)? And this can save you good money, perhaps to buy a new car next year!
Say your car is 7 years old and you haven’t claimed any motor insurance until now. The No Claim Bonus on your car can get you up to 50% discount on your premiums, when you buy your next car. However, what if your car meets with an accident in the meantime and the cost of repairs amounts to INR 2000? Should you claim insurance for such repairs? Experts recommend a “no” in this case. The 50% discount on your premium on NCB is remarkably beneficial when you are switching to a bigger car. But if, you claim insurance for smaller repairs as above, you won’t get discounts on premiums and you will have to pay a bulk amount from your pocket. Therefore, it is wise to pay for repairs on your own and leverage NCB to avail fantastic discounts on your new car auto insurance.
Car owners can also avail of No Claim Bonus benefits in the form of lucrative discounts on premium at the time of renewing their auto insurance, provided no claims have been made. And if you are not planning to sell the old car, you can leverage NCB on your vehicle and buy insurance for it at a much lower premium than available. But, it is important to understand that you cannot claim NCB for both your old and new car. Discounts available on auto insurance, provided no claims have been made, starts from 20% in the second year, 25% in the third year, 35% in the fourth year, 45% in the fifth year, and 50% in the sixth year. Delightfully, you can port your NCB benefits across vehicles and insurance companies. In that case, the policyholder has to submit documents that the old car has been insured through another policy and no claims have been made.
Claim on NCB is available only if the new vehicle caters to the same class as the previous one. For instance, if you have NCB on your vehicle that is being used for commercial purpose, you cannot transfer it to get premium discounts on a vehicle that is meant for private use. Similarly, NCB accumulated on your two-wheeler cannot be used to avail auto insurance discounts if you plan to upgrade to a car. But of course, you can upgrade to a bigger private car from your old car, and get lucrative discounts on premiums if you have No Claim Bonus. Typically, NCB is a feedback on your driving skills and car maintenance record. Since such information is not available in India, NCB serves as a proxy and has an impact on car owner’s eligibility to get an auto loan and premium discounts.
Experts recommend claiming insurance only when the cost of repair is at least INR 10,000. If you claim insurance for every little thing, it will have a negative impact on your NCB.
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