Understand No Claim Bonus (NCB)

NCB gain is incremental. For 1st claim-free renewal, you get 20% NCB. If you do not raise a claim for five consecutive years, you gain a 50% discount on Oown Ddamage (OD) insurance premium. However, the percentage will reset to zero once you raise a claim.

Example

Here’s an example: Mr A and Mr B bought expensive vehicles of the same make and model. Both paid Rs. 22,000 to insure their vehicles for the first year. For the second year, the premium would reduce to Rs. 20,000 due to a reduction in the value of the vehicles.

Mr A did not raise a claim during the policy period (first year) but unfortunately, Mr B was involved in a car accident and had to raise a claim for damages. Therefore, Mr A received a 20% discount on the premium payable for the second year (first claim-free renewal), but Mr B did not receive the discount as his NCB was zero.

No Claim Bonus is a reward offered to the policyholder for not raising a claim. This bonus is given as per the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI). Even if you decide to buy a car insurance from another insurance company or buy another car (after selling the current one), you can claim the NCB accumulated in your name.

You will need a No Claim Bonus Transfer certificate from the insurance company to be able to continue the benefit. Just remember that there should not be a gap of more than 90 days between the expiry date of your insurance policy and renewal. NCB transfer rules suggest that the benefit cannot be transferred to a new owner of the vehicle in case of a sale, as the NCB is associated with the car owner and not the car.

The information provided herein above is for the purpose of illustration only. For more details on risk factors, terms, conditions and exclusions, please read the policy wordings (https://www.acko.com/download) carefully.