Now Reading: How your no-claim bonus can cut car insurance by 50%
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How your no-claim bonus can cut car insurance by 50%
A no-claim bonus (NCB) can cut a vehicle's own-damage insurance premium by up to 50% after five consecutive claim-free years, according to Aditya Kumar, head of motor underwriting at Digit Insurance. The…
A no-claim bonus (NCB) can cut a vehicle's own-damage insurance premium by up to 50% after five consecutive claim-free years, according to Aditya Kumar, head of motor underwriting at Digit Insurance. The discount starts at 20% after one claim-free year and rises in tiers: 25%, 35%, 45% and then the maximum 50%.
The NCB belongs to the policyholder, not the vehicle, and is portable when selling the car or switching insurers. An NCB Retention Certificate valid for three years is required for the transfer. However, the bonus is lost if the policy is not renewed within a 90-day grace period or if a claim is filed. Some insurers offer an NCB Protector add-on that limits the discount reduction after a claim.
Indian Opinion Analysis
Indian Opinion Analysis: The no-claim bonus (NCB) is the insurance industry's oldest loyalty incentive, formalised in the 2002 IRDA Motor Tariff. For a typical private car in Delhi with an own-damage premium of Rs 10,000, a 50% NCB saves Rs 5,000 annually, money that compounds if the discount is preserved across vehicle upgrades. The 90-day expiry window after the policy lapses is the single most common reason policyholders lose their NCB, according to industry surveys. The IRDAI has mandated that insurers must provide the NCB Retention Certificate within seven days of a request, a rule from 2019 that strengthens the portability guarantee. The next decision many policyholders face is whether a claim for cosmetic damage is worth losing a 45% discount over, a calculation that depends on the repair estimate and the remaining policy tenure.
Source: businesstoday.in
This brief was synthesised by AI from the source linked above.
