How do claims influence your car’s insurance premium?

by Kanika Shelatkar Insurance Consultant

You forfeit a discount, called the No Claim Incentive when you file a claim on your car insurance policy. It’s a bonus you get for being a good driver and not making any statements during the duration of the system. If you renew car insurance online, you get a discount on the premium. Have a look at this article to learn more about the portion No Claim Bonus (NCB) and how it can affect your policy’s premium during car insurance renewal.

Understanding NCB

So, what is No Claim Bonus? NCB is a discount you get for not filing claims on your car policy during the term. The insurance company offers a discount on the premium in the following year when you complete a whole car insurance policy period without a zero claim. The NCB adds up, and it accrues in your account for any year that you do not file a claim. The NCB will hit as many as 50 per cent. When you do not make an insurance claim for five straight years, just half the insurance premium will be charged when you renew it in the sixth year.

Claims and NCB

As the name suggests, it is a bonus you earn for not filing a claim. You lose the advantage if you make even one small claim during the policy period. Also, if you have four years’ worth of NCB accumulated, an application in the final year can take away the entire amount and reset the amount to zero.

Objective of NCB

So why does the insurance company give you with the NCB when you go for a renewal of your insurance plan? There are some rational reasons for this. They are:

Inspires you to be a safe driver:

NCB can inspire you to drive safely and avoid falling into situations that could lead to claims for car insurance. Therefore, the No Claim Bonus aspect motivates you to be a careful driver and avoid reckless driving.

Discourages small claims:

At times, the car repair costs are low that you can easily afford it. The insurance companies frequently prevent you from filing small claims by providing the NCB. It assists you in maintaining and using your insurance policy when the expenses are higher.     

There are a lot of ways which can help save money when you renew your car insurance. Using your NCB wisely is one of them. So be a safe driver and make your claims prudently. If you can go an entire policy year without making a claim, you will earn a substantial insurance premium discount at the time of the successive renewal. Ensure to use it wisely and save money while keeping the car protected by the best insurance cover.

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Created on Mar 31st 2020 02:13. Viewed 305 times.

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