What Is A No-claim Bonus In Car Insurance?
As it actually mentions, it is a bonus that you receive at the time when your car
insurance is up for renewal, if you did not made any claims in the last year. Therefore it is a financial reward for driving as well as maintaining your car well, which resulted in you not making any sort of claims.It is probably the only financial vertical in which a person is directly rewarded in cash for good performance. In the financial world there is hardly ever a reward for better performance your only reward is generally avoiding penalties! For example, if you don't pay your credit card repayments on time, you would be charged a huge fee along with an interest and moreover your credit rating would go for a toss. And what if you pay on time nothing no benefits!
So as long as your insurance company is rendering you a no-claim bonus on your car insurance ensure that you put it to finest use. Here is an example of how you can benefit if things are managed well. For Example you possess a Maruti 800 car and the insurance premium for the same is Rs. 2000. You win a jackpot and buy a Merc whose insurance premium could be as high as Rs.50,000. If you have been acquiring your no-claim bonus, the insurance premium for the new car can be lowered by say 25%. Therefore you save a good Rs. 7,500 for just driving well as well as maintaining your car properly. In fact the NCB value can go upto 50% of the new premium value.
As you can check out in the above example the no-claim incentive on the car insurance is given to the driver and not the car. If you do not claim for one year you get 20% off, 2 years and you get 25%, 3 years and you get 35%, 4 years and you get 45% and for 5 sequential years you get 50% off on your car insurance premium.
And yes, the insurance regulator in India is working on making the auto insurance policies portable also. Therefore you can acquire the benefits even if you shift insurance companies.
Doesn't get better does it? So start driving safely!'
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