Car Insurance: No claims bonus – All you wanted to know

If you are a safe driver do you must be wondering if you deserve a break on your car insurance premium? If you think that way you would be right. Insurers give you a discount if you haven’t made a claim in the preceding years. This is called No Claims Bonus (NCB) in insurance parlance and can lead to substantial savings.

How much do you get?

The table below describes the discount you get on your own Damage (OD) premium.

Number of Preceding years with No Claims	Percentage Discount on own Damage (OD)  Premium
1 Yeas	20%
2 Years	25%
3 Years	35%
4 Years	45%
5  or more Years	50%

The discount is on the own damage premium. There is no discount on the third party portion of the premium. Even then the discounts are quite hefty and rewards for good driving are huge.

Can you carry it to another insurers?

What is more is that you can carry your NCB from one insurer to another should you decide to switch insurers. All you have to do is to ask your current insurer for your no claims bonus (NCB) certificate. Present you certificate to the new insurer and you can get a discount with the new insurer as well. Most insurer will also give you couple of months to present the NCB certificate.

Can I transfer my NCB to my new car?

Here is an even better news that most people don’t know about. While most people know that they can carry their NCB to a new insurers, what most people don’t know is that you transfer your NCB to a new car you buy. As the premiums for new cars tend to be high, this is a lot of saving in premium.  What you need to make sure is that the policyholder on the old car and the new car. NCB follows the fortune of the policyholder.

How can I protect my NCB?

There are generally two ways to protect your NCB. If you a damage that requires only a small amount to rectify then consider if it is worth while paying for it yourself. Compare the amount insurers will pay for the claim with the amount you will save in no claims bonus before taking that decision.  Repair costs can add up very quickly so be very careful before deciding not to file a claim.

Off late some insurers have been providing an option to protect your NCB from one accident a year. You will need to pay an additional premium to avail this benefit.