Q: What is a No Claim Bonus or NCB?
➡️No Claim Bonus or NCB is a reward given by an insurance company to an insured for not raising any claim requests during a policy year. The NCB is a discount ranging between 20%-50% and is given to the insured while renewing a policy. The NCB discount is offered on the premium amount during renewal. This discount is transferable and can be transferred even if the policyholder buys a new vehicle.
Discounts you get as in NCB:-
🔸After year one of no claim = 20%
🔸After two consecutive years of no claim = 25%
🔸After three consecutive years of no claim = 35%
🔸After four consecutive years of no claim = 45%
🔸After five consecutive years of no claim = 50%
While you Pay your Vehicle Insurance Premium every year, it is important to know how it is calculated. Your vehicle Insurance Premium has 2 parts:-
Own Damage Protection + 3rd Party Insurance Cover
ODP = This is for your own vehicle damage
3rd Party = This is for the other person with whom you caught up in an accident.
While the Insurance companies gives discount every year ranges from between 20% - 50% if you don't make any claim(NCB), it is important to that this discount is only calculated on ODP.
No NCB for third party cover
Remember, the NCB discount is applicable only to the own damage premium component and not the third party liability premium, which constitutes 40% of the total premium.
🔸For instance, my vehicle has yearly premium of ₹15,000
15000 breakup :- 8000(ODP) + 7000(3rd party)
The maximum discount I'll get is 20% on 8000 = ₹1600 and not on 15000 on total.
So it becomes very Important to calculate before making any claim that whether we should claim the Insurance or not.
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