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Reduce your car insurance costs by understanding No Claim bonus
Renewing your car insurance may not seem very interesting. However, seeing the No Claim Bonus (NCB) discount might make you see things differently.
This is because this handy discount rewards careful drivers by lowering their premiums when they avoid making claims. In fact, for Indian drivers facing crowded roads and unpredictable traffic, learning about NCB can result in big savings in the long run.
Let us see how this system works and why it matters.
What is a NO Claim Bonus?
A No Claim Bonus is a discount that insurance companies give you when renewing your policy if you haven’t claimed for damages during the previous year. Simply put, it’s a way of saying “thank you” for being a safe driver. The best part is that the longer you go without making claims, the bigger your discount grows.
| Years without claims | NCB discount |
|---|---|
| 1 year | 20% |
| 2 years | 25% |
| 3 years | 35% |
| 4 years | 45% |
| 5+ years | 50% |
How does NCB work in practice
Let’s take an example. Let’s take Rahul from Mumbai, who pays ₹15,000 per annum for his SUV car. At the end of a claim-free year, he gets a 20% NCB, bringing down his premium to ₹12,000. If he drives carefully for five years, his premium can come down to as little as ₹7,500.
Why it matters
As automobile prices rise and city streets become congested, insurance charges soon mount. That is where NCB comes into play with a reasonable way of saving on such charges. And the best part is that it accompanies you and not your vehicle.
For example, if Rahul sells his SUV and buys a new sedan car, he can transfer his NCB to the new car.
Maximising your NCB benefits
For minor damages, it might be worth paying for repairs yourself. A ₹5,000 dent might cost less out-of-pocket than losing a 30% NCB. Therefore, always check your renewal papers to make sure you’re getting the right discount.
Conclusion
Drive safe, save more!
The No Claim Bonus turns careful driving into real money saved. By avoiding minor claims, you can enjoy lower premiums year after year. So, when your next renewal comes around, look for your NCB - you might be pleasantly surprised by how much you’re saving.
Disclaimer: This article is for information purposes only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
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