When you buy car insurance, one of the foremost things you look for is affordable premiums. But did you know that you can make the premiums more affordable simply by being a responsible driver? That’s exactly where a no-claim bonus (NCB) cover comes into the picture. Here’s more information on it!
What exactly is an NCB protection cover?
No-claim bonus protection cover is a type of bonus that your insurance company offers you if you do not make any claims within a policy year. You get a bonus for each claim-free year. So, the total bonus you accumulate gets you a discount on own damage portion of the premium for the next year.
In other words, if you accumulate the no-claim bonus, then you get the opportunity to renew your insurance with a lower premium. You can enjoy this reward until you make a claim or the policy expires/lapses. The accumulated bonus offered varies from one insurer to another, though it is usually set at 20 percent and above.
Why is NCB protection cover important for car insurance?
While the NCB protection cover can help you save on premium, there are other advantages to it as well. Here are two more reasons why this benefit is important:
Makes you a responsible driver – One of the main purposes of this bonus is to reward you for being a responsible driver. So, the fact that you can save up on the premium urges you to be more careful on the road.
The bonus is portable – You can port the benefit to your new car in case you sell your old one. In fact, you can even port this benefit to another insurance company if you want to transfer your policy to another insurer.
Important features to note about the NCB
Whether you are a new or experienced driver, every car owner needs to make the best use of NCB. Therefore, you need to be aware of the following features of the benefit:
NCB is attached to the policy holder– NCB is attached to the individual and not to the car. You do not have to lose your NCB when you sell your car. You need to submit an NCB retention application to your insurer. It will make you transfer the insurance minus the NCB. Afterward, you can purchase another policy, add the NCB, and continue enjoying the rewards.
Role of NCB in claim settlement – The NCB you accumulate is typically used to settle your insurance claim. However, you can still submit an application to the insurer to retain the NCB even after making a claim.
Situations for an NCB lapse – You need to renew a policy within three months from the expiry date to retain the NCB. Also, if the policy is cancelled before the end of the term, then there is no NCB offered.
You now have all the necessary information about NCB benefits offered in car insurance. Make sure you talk to your chosen insurer to know more about the percentage of NCB they are ready to offer.