1. Reduce Car Insurance Premium with No Claim Bonus
Ask any expert as to how to reduce car insurance premium, the advise is “drive safely, avail
NCB”. No claim bonus or NCB is one of the major factors affecting car insurance premium. It is
a discount that the vehicle owner gets if he doesn’t make a claim the whole year. Percentage of
bonus increases for every claim free year.
How is NCB Calculated
NCB can be availed for every claim free year of the vehicle. It is calculated on the own damage
part of the insurance premium and not the third party insurance. Own damage (OD) premium
forms a major component of comprehensive auto insurance. One can get up to 50% discount on
it.
For no claim during the previous year one gets 20% discount on OD, For no claim during two
previous years discount is 25%, For no claim in three preceding years discount is 35%, for no
claim during four previous years, discount is 35% and for four or more preceding claim free
years, the discount is 50%.
Once a claim is made, the NCB becomes nil. The next premium is higher and the whole process
of accumulating NCB will begin from zero. Some insurance companies offer an add-on cover to
protect NCB
How to Avail NCB
The insurance company automatically includes the discount in the renewal notice. If the car
insurance has lapsed and you renew it within the grace period of 90 days, you can still avail the
NCB. If insurance is not renewed within the grace period, NCB lapses. There are certain things
to take care if you are selling the car or changing the insurance company.
If you are changing the insurance company, make sure that you take the no-claim bonus
certificate. Once you present it to the new insurance company, it will be implemented. It is
important to take this proof as without this the discount cannot be availed.
No-claim bonus is offered to the person and cannot be transferred to the new owner if you are
selling the car. Make sure that you get the no-claim bonus certificate from the insurance
company before transferring the insurance. You can avail this benefit on your new car if you buy
it within 3 years of selling the old car. The discount slab will remain the same as it was at the
time of selling the old car.
Make the most of being a safe driver and avail the Bonus. It is the single most effective way of
reducing car insurance premium.