Since third-party liability car insurance is mandatory, buying a new policy is paramount when you buy a new car. You have to consider a number of things, like the sum assured, coverage, type of the policy and the policy premium.
The amount you pay for the financial coverage and benefits that the insurer provides is called the car insurance premium. You can adjust, i.e., reduce the premium amount using small tactics. One such tactic is utilising the no-claim bonus.
Let us understand how you can retain your NCB and get lower insurance rates for your new car.
No-Claim Bonus in Car Insurance
NCB is a discount that the insurance company offers when you go claim-free for an entire policy period. If you end your policy term successfully without raising any claim, you earn the bonus.
You receive this discount on the premium of your existing policy’s renewal. You can keep on claiming NCBs as you move forward with your existing policy since they are cumulative in nature.
However, what most people do not know is that you can forward the cumulated no-claim bonus to your new policy when you buy car insurance and get a low-premium quote. Let us understand how!
Retain NCB from Older Cars and Utilise It to Reduce Policy Premiums for New Car
● Earn NCB
If you want to benefit from NCB, you need to earn money, and this step begins when you buy your old car insurance. The first thing you need to do is avoid filing a claim at all.
As mentioned above, your NCB keeps on accumulating as policy terms pass by. Usually, your NCB starts at a 20% discount and goes up to a 50% discount over the span of 5 consecutive claim-free years.
● Retain NCB on New Car
Accumulating and retaining NCB is highly recommended. Most people go claim-free for 1-3 years, and then something goes wrong. Either the person makes a claim, or they miss renewal of the policy.
However, keep a track record of earning NCB and retain it for your new four-wheeler. Yes. Your NCB can be passed onto your new car and car insurance policy. This transfer of NCB can significantly reduce your policy premium and offer you a lower car insurance rate.
● Get an NCB Certificate
In order to transfer your NCB to your new car, you will have to get a no-claim bonus certificate from your current insurer. This certificate serves as proof of your accumulated NCB and passes the bonus or discount onto the other policy.
The certificate is like a document that proves you have low risk associated with and are a responsible driver. Contact your travel insurance policy provider. Understand the process of applying for and getting your NCB certificate done.
● Earn Low-Premium Car Insurance
With an NCB certificate in your hand, you can now apply for a new car insurance policy and get low insurance rates for your car. When the new insurance provider verifies and authenticates the NCB certificate on your policy, they quote a lower car insurance rate for the same benefits and coverage.
This results in sustainable savings, making your car insurance affordable, profitable and just better. Consider buying from a fair and rightful policy provider, like Tata AIG, to get better quotes.
How to Earn NCB on a Four-Wheeler Vehicle
● Drive Safely
Following all the traffic rules and regulations enables safe driving, helps avoid accidents and minimises the risk of filing claims.
● Park Securely
Parking a car is an extremely small aspect of owning a car. However, many accidents happen when a car is parked. If you park the vehicle in a safe place, this risk is automatically reduced.
● Regular Maintenance
Maintaining your car, timely servicing centre visits and keeping your car in good condition offers a long-lasting vehicle. This avoids accidents due to brake failure, breakdowns and other car-related issues.
● Avoid Small Claims
If the repairs you make are minor, if you can afford to make out-of-pocket expenses, ensure that you do that. One small claim and all the accumulated NCB will go away. You can consider your deductibles as a parameter. If the claim you raise is not more than the deductibles of your policy, then do not make the claim. Pay it out-of-pocket.
Ending Note
Money is a very valuable asset in today’s day and age, and you need to save it in any way possible. What better way to do that than to save up on a financial instrument that can fund you when you are in trouble?
By understanding how NCB works, you can enjoy significant savings on your car insurance policy while enjoying all the perks of a standard policy.
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