Kalyani Narayanan, CEO  says

Do you know what NCB% means in Car Insurance Policy?

NCB stands for ‘No Claim Bonus’. This is represented in %. It is a discount offered by insurance company upon renewal for not making any claim on the insurance. As a reward for being a safe driver, when you renew your policy, the insurance company gives this discount on your premium.

Let us say you buy a car for the first time. You do not get any discount. Upon completion of first year (and you do not have any claim), the insurance company gives 20% discount on your first time renewal. During 2nd year, this discount goes up by 5%, 3rd year by another 10%, 4th year another 10% and finally during 5th year, it reaches the maximum of 50%. So, if you have not had any claim for 5 consecutive years, you can get 50% discount on the premium paid for the own damage portion (not the 3rd party liability part).

To avail this bonus, you have to renew the policy in a timely manner, that is, within 90 days of expiry of your current policy. Also, if you get involved in an accident and make an insurance claim, the NCB% comes to 0% the next year. In other words, no discount is given if you make a claim. You need start earning from zero again.

The NCB% enjoyed for one car is transferable to another car. Let us say, your car has become 8 years old and that you would like to sell your old car and buy a new car. You can apply the NCB% that you may have on your old car policy on your new car.

NCB% is also transferable between insurance companies. So, if you have 35% NCB in your current insurance company, you can get the same % discount from another insurance company also should you decide to change your insurance company.

Check the NCB% mentioned in your policy document today and work towards making it 50%.

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