• As a vehicle owner, you need to be aware of the mandatory requirement to have an insurance policy, in addition to the registration and PUC for your automobile. This stipulation established by the Motor Vehicles Act makes it a legal obligation for not only car owners but all varieties of vehicle owners in India—whether privately owned or used for commercial purposes.

• When purchasing car insurance online, the policies are categorized into two main types—a third-party cover and a comprehensive insurance cover. A third-party policy only covers the liabilities owed by the policyholder. Such liabilities can arise due to an accident resulting in injury to a third party or damage to property. Conversely, comprehensive plans cover not only these liabilities but also any damages to the policyholder’s vehicle.

• Apart from providing a financial safeguard for damages to your vehicle, a comprehensive policy also includes additional benefits like the No-Claim Bonus (NCB). This is a renewal advantage granted by the insurer for not filing a claim. Since the insurance provider does not need to offer compensation when no claims are made, this renewal incentive is given to the policyholder. Therefore, by refraining from making a claim, you can benefit from a reduction in your renewal premium.

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When Does the No Claim Bonus Get Cancelled?

The No Claim Bonus feature may be canceled or forfeited if:

• You submit a claim during the policy term. Once a claim is filed, the NCB is no longer applicable at the next renewal.

• You do not renew the policy before its expiration, which may lead to the loss of the NCB.

Terms and Conditions of a No Claim Bonus

• While the No Claim Bonus is an appealing feature, it is accompanied by certain terms and conditions, outlined below:

• An NCB is linked to the policyholder, not to the vehicle, meaning it can be transferred if you purchase a new car.

• If you file even a single claim during the policy term, you will lose the NCB for that year. However, if you have an NCB add-on, you can safeguard your accumulated bonus even if you make a claim.

What is a No Claim Bonus Add-on?

• An NCB Add-on is an optional coverage you can buy with your car insurance policy to protect your bonus. In the event of a minor claim, this add-on allows you to maintain your accumulated NCB, ensuring that your premium discount stays intact during the renewal of your car insurance. This is particularly beneficial for drivers who seek peace of mind without compromising their hard-earned discounts.

How Can You Protect Your No Claim Bonus?

• One of the most effective ways to safeguard your No Claim Bonus is to drive responsibly and avoid making unnecessary claims. Choosing an NCB Add-on ensures that minor damages do not impact your accumulated bonus. Furthermore, consider covering minor repairs out of your own pocket instead of claiming insurance. By preserving a claim-free record, you can enjoy significant discounts on your insurance premiums.

How to Maximise Your No Claim Bonus?
Maximizing your No Claim Bonus involves various strategies, such as:

• Drive cautiously and responsibly to prevent accidents and lessen the necessity of filing claims.

• Consider acquiring an NCB Add-on to safeguard your bonus in the event of minor accidents.

• Reflect before making small claims. Sometimes, it’s more economical to pay for minor repairs out of your own pocket and maintain your NCB for greater savings on your next car insurance renewal.

Common Errors in NCB Calculation

• One frequent error in calculating No Claim Bonus is believing that it pertains only to the own damage section of your insurance, while it actually doesn’t. Another mistake is presuming that filing a small claim won’t influence the NCB. Unless you possess the NCB Add-on, any claim will reset your accumulated bonus. Ensure that you fully comprehend the terms of your NCB to optimize its advantages.

Points Regarding No Claim Bonus (NCB) That You Should Know About

1. NCB Lowers OD Premium

The No Claim Bonus can decrease the Own Damage (OD) premium for your car insurance. However, the greatest discount you can receive is 50%, and this is achievable only after driving claim-free for five continuous years. Once you reach this limit, even if you continue to remain claim-free, you will not qualify for an NCB exceeding 50%.

2. NCB Is Transferable to Your New Car

The No Claim Bonus is personal and not associated with your car. This means that if you purchase a new vehicle, you can transfer your current NCB to the new car. However, the new vehicle must belong to the same class as the one on which the NCB was accumulated. Furthermore, NCB can only be transferred to another individual in the case of the car owner’s death, as long as the vehicle is passed on to a legal heir. The NCB must be transferred to the legal heir within 90 days.

3. NCB Does Not Apply to Third-Party Premium

The No Claim Bonus is inapplicable to the third-party insurance premium. It solely reduces the premium on your Own Damage (OD) coverage. Therefore, when calculating your NCB, keep in mind it only applies to the OD portion of the premium, not the third-party liability part.

4. Incorrect NCB Declaration May Result in Claim Denial

Declaring an incorrect NCB can lead to severe consequences, including the denial of your future insurance claims. Always ensure that the NCB information you provide is precise, as an incorrect declaration can nullify your coverage or result in legal issues.

Conclusion

In summary, comprehending and utilizing the No Claim Bonus effectively can lead to significant savings on your car insurance premiums. By driving responsibly, avoiding unnecessary claims, and protecting your bonus with an NCB Add-on, you can maximize this advantage during your car insurance renewal. Whether you are insuring a Maruti Suzuki or any other automobile, the NCB is essential in minimizing your overall insurance expenses. For further details on how to calculate and safeguard your NCB, visit the official website of Bajaj Allianz General Insurance Company.