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No Claim Bonus on Car Insurance - Why it is Important to Know

22 June, 2017

For many car owners, motor insurance can be troublesome, but if chosen carefully, it is actually a time saver and offers certain benefits. No-claim bonus on buying a car insurance online is like a reward offered by the insurer to the policy holder for not making claims in the past few years. It’s like an incentive given to the policy holder as a bonus for safe driving. No-claim bonus is an important part of any car insurance policy as premiums tend to increase due to ever-rising inflation and thus, getting even a small discount on premium is like a relief for the policy holder. Here are a few things about NCB that are important for you to know:

1) It only belongs to you, not your car: The most significant feature of no-claim bonus is that it is associated with the policy holder, not with the car. Hence, when you sell your old car and upgrade it to a better model, you can transfer your no-claim bonus to your new car too. This transfer can be made within your exiting company, or if you wish to switch to a different company, you can do that as well. NCB transfer involves a very easy procedure. While most companies process it without any hassle, some may ask for a declaration to prove its authenticity. However, NCB transfer is only allowed from car-to-car and not from person-to-person, except when someone inherits the vehicle upon the death of the policy holder.

2)  NCB discount is not applicable for the third party cover: You must remember this that no-claim bonus is only applicable to the own damage premium part, but not to the third-party liability premium. In simple terms, this means that no-claim bonus is not available on third-party insurance for cars.

3) NCB is only available on renewal of policy: No claim bonus is a discount that cannot be claimed as a right but has to be earned by maintaining a claim-free record. Hence, when you buy your first car insurance policy you are not eligible for any no-claim bonus on the premium you pay. You can avail your reward at the time of the first renewal of your policy, which means that there should be no claim in the past one year.