What is NCB and how to retain it in your car insurance

Comprehensive car insurance plans offer you innumerable benefits. Besides proclaiming to offer you a comprehensive scope of coverage, you get add-ons to enhance the coverage, value-added services and also attractive premium discounts. Actually, the premium discounts offered in auto insurance policies can help to eliminate the premium by over fifty percent. No Claim Bonus is one particular method to reduce your auto insurance premium. What happens no claim bonus is and just how can you maximise its utilization? Let's find out –

What is NCB in insurance?

Coverage underneath the car insurance policy has a term of 1 year. If, in the past year, you do not make any claim in your policy you receive a no claim bonus. This no claim bonus enables you to claim reasonably limited discount within the renewal premium for the next year. Moreover, if you don't make any claim in simultaneous policy years too, no claim bonus rate keeps increasing and offering you higher premium discounts every year.

NCB Rate

Now that you know what's NCB in insurance and that it increases each year, let's have a look at the NCB rates. Listed here are the applicable rates of no claim bonus available in auto insurance policies –

NCB Retention

Though NCB allows attractive premium discounts, you lose the accumulated NCB if you make claims in your policy. Moreover, let's say you sell your vehicle, you have to transfer the accumulated NCB from your car insurance policy inside your name to retain it.

Process of retention

The tactic to retain the NCB depends upon the situation when retention is required. As mentioned earlier, there are two instances wherein you have to retain your NCB –

1. When creating a claim
2. When selling your car

Here is the process for each instance –

1. When creating a claimWhen you make a claim inside your policy, you lose the NCB. To retain, you may either not raise a claim or select a NCB insurance add-on. Not making a claim is suggested if your claim amount is small. For smaller claims, it's beneficial to pay the costs from your pockets instead of creating a claim and losing the NCB discount. However, when the cost is substantial, making a claim is inevitable. In that case, having a NCB insurance add-on is suggested. The add-on protects the accumulated NCB even if a claim is made underneath the policy. You just have to choose the NCB insurance add-on when purchasing or renewing your car insurance policy and pay one more premium. Should you choose so, your NCB could be protected even when you make a claim.
2. When selling your carIf you're selling your vehicle, you should request the insurer for any NCB transfer. The insurance company would ask you to submit an evidence of the sale of the car after which issue a NCB Certificate inside your name. This certificate can help you in retaining your accumulated NCB. Whenever you purchase a new car along with a new car insurance, you can use the certificate to assert a NCB discount within the policy's premium. The certificate could be valid on another car insurance policy inside your name.

   NCB is, therefore, a great way to lower your car insurance premiums by as much as 50%. You should, therefore, be cautious in retaining your policy's NCB whether you sell your car or claim. NCB protect add-on is essential for protecting your accumulated NCB and earning a considerable premium discount. Make sure to choose this add-on when buying or renewing your car insurance policy. In case of selling your car, make sure to avail the NCB certificate. Protect and employ your policy's NCB and save money on your premium costs.