When a policyholder purchases an insurance policy, he receives an NCB certificate, and it is now up to him whether or not he files any claims within the policy year. If he files a claim, he will lose his eligibility for the NCB benefit for the following year; but, if he does not file a claim for the entire year, he will remain eligible.
What is NCB?
The benefit earned by an insured for not filing a claim during the prior policy period is known as a No Claim Bonus (NCB). According to Indian regulations currently in effect, it starts at 20% on the Own Damage premium (and not the Liability premium) and gradually rises to a maximum of 50%.
How to transfer No Claim Bonus (NCB)
If you change insurers at renewal, you can transfer NCB facility. You would be required to provide proof of the NCB obtained in the form of a renewal notice from your current insurer. You can also present your original, expired policy, as well as a verification indicating you have made no claims on the expiring insurance. Proof can be in the form of a renewal notice or a letter from the previous insurer confirming the NCB eligibility.
When is NCB terminated?
According to the Kotak General Insurance, “As long as you do not claim, you will continue to get the benefit of NCB protection. But if you have to claim for any reason during a policy year then you will not get the benefit of NCB in the next policy year.”
How is the no claim bonus (NCB) calculated in car insurance?
After the first year of the policy, there is no claim bonus. If you renew your coverage within 90 days, it is computed as follows:
If you do not submit a claim during your first year of coverage, you will earn a 20% discount on your premium in the form of a no claim bonus in vehicle insurance.
The no claim incentive percentage will be 35% after three years of no claims.
If the claim is not filed within four or five years, the NCB will be 45% and 50%, respectively.