Car owners know how valuable a No Claim Bonus (NCB) can be. It is the reward you earn for being a responsible driver. For each year you go without making a claim, your insurer offers a discount on your car insurance premium, which can go as high as 50%.
However, one minor claim can reset that bonus to zero. The good news is that you can restore it with the right steps and protect your savings in the future.
Understanding the No-Claim Bonus
The No Claim Bonus is a benefit given by insurers to reward safe driving and claim-free years. Here’s how it typically works:
- After the first claim-free year, you receive a 20% discount on your next renewal.
- Each subsequent claim-free year increases this discount, up to 50% after five years.
- The bonus applies to the own damage portion of your premium and not for third-party coverage.
You can easily check your NCB details when you renew your car insurance online. Many insurers provide a clear breakdown of your accumulated bonus and how it impacts your premium.
How Does an Accident Affect Your NCB?
When you file a claim after an accident, your NCB typically gets reset. Even a small repair claim can affect it unless you have a protection add-on. For example:
- Suppose your car insurance premium is ₹10,000, and you have earned a 40% NCB.
- That means you’re paying ₹4,000 less due to your bonus.
- If you file a claim, you lose this benefit, and your premium jumps back to ₹10,000 during renewal.
While insurance covers your repair costs, losing the NCB can lead to higher long-term expenses. That is why many policyholders look for ways to restore or protect their No Claim Bonus.
Steps to Restore Your NCB
If you have lost your No Claim Bonus after filing one or two claims in a policy year, there are ways to recover or rebuild it over time.
Opt for NCB Protection Add-On on Renewal
You can choose the NCB Protection add-on when buying or renewing your car insurance policy. This add-on allows you to retain your No Claim Bonus even after filing one or two claims during the policy period.
Transfer NCB When Switching Insurers or Cars
NCB is linked to you, not the car. If you buy a new car or switch insurers, you can transfer your existing NCB using an NCB certificate.
Avoid Small Claims for Minor Damages
For minor damages or scratches, consider paying from your pocket instead of filing a claim. This will help you keep your NCB intact.
Maintain a Safe Driving Record
The fewer claims you file, the higher your NCB grows. Safe driving habits directly contribute to long-term savings.
Tips to Preserve Future NCB
- Renew your policy before it expires. Delayed renewals can cause your NCB to lapse.
- Choose a higher voluntary deductible to lower small claim frequency.
- Use telematics or app-based monitoring (offered by some insurers) to track and improve your driving behaviour.
Conclusion
Restoring and maintaining your No Claim Bonus helps you save significantly on car insurance premiums over time. It encourages responsible driving while keeping coverage affordable. With insurers like TATA AIG offering NCB protection add-ons and easy renewal options through car insurance online, you can save on your car insurance premiums.