Detailing about what is NCB in Insurance and how can an 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 added to premium every year which has gone without claim. If you have not claimed any cover from insurance for a year, then the NCB benefit can use for premium for next year and thus that automatically lowers your premium amount.
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 got a Vehicle Insured Declared Value of Rs 4lakhs, and thus premium set to Rs.12,000. If in the first year, there was no causality met and the vehicle hasn’t met with an accident, means the policyholder not used any claim.
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 made during the policy year
- The policy left for renewal and hasn’t touched for 90 days
- Date of Expiry of an existing policy has crossed
- NCB valid for 2 years only, thus every year it should check with the insurer
You may check complete details in Wikipedia.
- Can No Claim Bonus be Transferable?
Yes, as No Claim Bonus offered for owners of vehicles not for vehicles or accessories. If a policyholder is buying a new car with a new protection plan, then previous NCB may transfer without any due effect.
- Can No Claim Bonus Protected?
Yes, insurers provide you extra premium benefits that protect your NCB. Any claim for existing year made and will not affect your No Claim Bonus as it separately protects in extra Add-on premium.
- If the Vehicle met with an accident, does No Claim Bonus work?
The vehicle driver declared as fault for the accident then No Claim Bonus may not valid. If a third party found guilty, and No Claim Bonus may affect and thereby charges the expense divide into two parties.