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How does NCB help in reducing premium?

Posted by Royal Sundaram on 05 Oct 2016

How-does-NCB-help-in-reducing-premium

There are several ways to reduce the car insurance premium while buying the policy. One of the most effective among them all is NCB. NCB stands for No Claim Bonus. It is applicable only when you do not apply for a claim, and can be used at the time of renewal of policy. If a claim is not filed for several years in continuation, then NCB is substantial. This reduces the car insurance policy premium amount significantly. Let us now understand NCB in details.

What is NCB?

  • -When you drive each year and do not make any claim to your car insurance provider, you will receive a no claim bonus.
  • -In this case, you will receive a discount on the cost of insurance cover at the time of renewal as you have not filed any claim.
  • -This way, if you have not made claims for a few years, the reduction of your car insurance cover will be in proportion to the number of years for which you have not filed a claim.
  • -This discount is given as percentage discount on the premium amount to be paid, and varies from 20% to 50%.

When are you eligible for NCB

  • -Many people are under the perception that NCB can be utilized at any point in time. Well, that is not true because if you have a purchased a comprehensive car insurance policy for the first time, you will most likely not to be eligible for NCB discount.
  • -This is of course because there is no previous record of claim-free years that add the necessary bonus points or discount.
  • -So after the first renewal of your policy, you can claim up to 20 per cent discount.

NCB and Premium

  • -None of the insurance companies like to lose their customers. Therefore, in order to retain their customers, they offer attractive offers such as no-claim bonus to the existing policy holders.
  • -NCB acts as a reward for keeping your ride in top condition.
  • -Premium cost comes down to a marginal figure with accumulated no-claim bonuses, however, it is important to find out the policies laid out by your respective car insurance provider.

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