Detailing about what is NCB in General Insurance and how can a insured person can avail NCB for their two wheeler (bike) or car, Here you can find all the tracking movements of NCB when it gets invalid and the process…
What is NCB in Insurance
NCB stands for No Claim Bonus, a reward given to clients by General Insurance service provider, and the No Claim Bonus comes into effect, if the policyholder has not claimed any claim during the term of insurance. Even if change of vehicle to new owner, will allow the original owner to claim the NCB.
A minimum of 5% NCB is added to premium every year which has gone without claim, and if you have not claimed any cover from insurance for a year, then the NCB benefit can be used for premium for next year and thus that automatically lowers your premium amount, where in this article we will know what No Claim Bonus is in detail and the process is to claim it.
How to Avail No Claim Bonus
If a policyholder has got a Vehicle Insured Declared Value of Rs 4 lakhs and thus the premium has been set to Rs 12,000. If in the first year there was no causality met and the vehicle has not met with an accident, which means the policyholder hasn’t used the claim facility.
This activates the No Claim Bonus of 20% and this decreases the next year premium of policy holder to Rs 9,500, and thus, at the start of the second year the policy holder gets a benefit of Rs 2,500 for not making any claim.
- No Claim Bonus increase by 20% after completion of 1st year
- NCB increases by 25% after completion of 2nd year
- It increases 5% every year till 5th year making a total of 50% for 5th year.
When does NCB gets invalid
Before going to know how to claim the No Claim Bonus, it is necessary to know how NCB gets invalid, and there are few points that must be aware before going to ask for a No Claim Bonus claim.
- A Claim has been made during the policy Year
- Policy has been left for renewal and has not be touched for 90 days
- Date of Expiry of existing policy has crossed
- NCB is valid for 2 years only, thus every year it should be checked with insurer
Can No Claim Bonus be Transferable?
Yes, as No Claim Bonus is offered for owners of vehicles not for vehicles or accessories, and If the policyholder is buying a new car with a new protection plan, then the previous NCB can be transferred without any due effect.
Can No Claim Bonus be Protected?
Yes, insurers provide you extra premium benefits that protect your NCB, and If any claim for existing year has been made and this will not affect your No Claim Bonus as it is separately protected in extra Add-on premium.
If Vehicle met with an accident, does No Claim Bonus work?
If the vehicle driver has been declared as fault for the accident then No Claim Bonus will not be valid and if the third party is found guilty, and then No Claim Bonus will be affected which thereby charges the expense divided into two parties.