Every state in America now has a lot of four-wheelers. At the same time, the number of drivers is increasing at the same rate. And most drivers make a claim that goes through the year. However, it is also true that many drivers drive a car all year without any fault. We are here to discuss an issue that is only useful for the drivers who have been driving their car for years with no fault. You probably understand what we are talking about. Yes, we are talking about the No Claim Bonus.
So, Let’s see the details about the NCB.
Yet, many among us have the misconception that car insurance is only necessary for those who cannot drive well. They think that good drivers don’t usually get into an accident, so it’s a waste of money if they take out insurance. This is because since they do not need financial assistance from their insurer for any accidental reason, there is no need to buy insurance.
But for those who can drive very well, that is, for those who have not had an accident all year, there is a nice discount from the insurer. This discount is called NCB, which means No Claim Bonus. If you have auto insurance and you don’t make any claim since last year, then you’ll be suitable for this bonus. Now the question may come, how will a driver get this bonus amount? This bonus is basically given during the insurance renewal period. Drivers can renew their insurance by deducting the NCB bonus amount from the original insurance premium.
Different insurance companies offer different amounts of No Claim Bonus to their customers. In most cases, it is seen that they offer a minimum of 10% to 50% discount on their renewal price.
How Does No Claims Bonus Works?
Like all other people in the world, if you try to reduce the price of a thing when you buy it, why not when buying insurance?
The question that arises in people’s minds at the beginning of knowing about the No Claim Bonus is how it works? Well, we’re talking about this.
It works by maintaining a very simple formula. Suppose you bought insurance and did not claim any insurance cover within a year from your purchasing date. Then the insurance company will give you 20% less on your insurance premium. If you pass another year without any claim, then the insurance company will give you an additional 5% to 10% discount on your premium, which means now you’re getting 25% to 30% less on your renewal cost. This phenomenon can last for five consecutive years. However, some companies may pay more.
The bottom line is that the better you drive, the less premium you have to pay.
How is NCB calculated?
Another curious question among drivers interested in learning about the No Claim Bonus is how this NCB is calculated? No claim bonus is acceptable for liability insurance. Because it is third-party insurance, and although it is prescribed by law. Because there are only 20% goes for a third-party premium. Therefore, the No Claim Bonus is calculated by deducting this 20% from the No Claim Bonus. Most drivers do not understand this calculation and think they may have been miscalculated. This is because they only calculate the discount earned from their No Claim Bonus for their premium calculation.
There we’re going to show a chart from where you can get a concept of calculation for No Claim Bonus.
|No Claim Bonus (%)||Year of No Claim|
Is No Claim Bonus worth it?
Some Skeptic people always ask, is NCB worth it? It depends entirely on your circumstances. The No Claim Bonus will actually give you a groundbreaking discount if you don’t have any accidents for a long time, especially for one, two even five years continuously. If you drive without a claim for five consecutive years, you will get up to a 50% discount, which is excluded from your insurance price.
Again, even in the event of an accident, you will be deprived of all these benefits. Note that this is not a claim bonus that you will lose in the event of an accident, only if you issue a claim for an accident. You will also lose your NCB benefit if the other driver hits on your insurance for the accident.
On the other hand, if you are not confident that you will not be able to drive accidentally in one year, it will give you a very frustrating output. In this case, unfortunately, you will not get any benefit through this No Claim Bonus. You must drive your car consciously so that there doesn’t come any situation when you have to go to your insurance coverage.
Is it useful? The most acceptable answer to this question is that yes, it is definitely fruitful for you if you can pass the claimless year.
Can I have a No Claim Bonus for More Than 1 Car?
Your answer to this question may disappoint you a little. This is because insurance companies usually do not provide more than one vehicle to the customer to claim a No Claim Bonus. This means that you can only apply your non-claim bonus to a vehicle.
However, the hope here is that you can transfer your NCB from one insurance to another. For example, if you buy a new car and new insurance against your new one, your No Claim Bonus will transfer to your new insurance from old insurance coverage if you want. But, you have to make sure that you have bought your insurance from the same insurance company you used previously.
When you drive your car safely, and without risk on the road, your insurer appreciates it. Because then they don’t have to pay for the accident. So they give you the NCB as a gift. So, if you are thinking of reducing the insurance premium, there is no substitute for the claim bonus for getting this gift by carefully driving the car without any accident and a claim.
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