A motor insurance policy lasts for a year, and if you do not make any claim during the period, you are rewarded with No Claim Bonus (NCB) by the insurance company at the time of renewal. The percentage of NCB keeps increasing every year as long as no claim is made. In fact, NCB is a discount on the motor insurance premium, but it is given only on own damage premium, not on the third-party premium in a comprehensive motor insurance policy. And since own damage premium constitutes 80-90% of the total premium, NCB can save you a lot of money. However, there is a 50% cap on NCB. While the best way to accumulate NCB is to drive safely, there are other ways as well:
NCB protector add-on
Some insurers have the provision to buy NCB protector add-on for Rs500-800. At the time of getting your vehicle insurance
policy renewed, go for this add-on which will help you protect your NCB at a nominal cost. However, it is advisable to opt for
this add-on only when you have accumulated 20% or more NCB because there is no point in purchasing it in the first year when NCB is 0%. Moreover, this add-on can be purchased only if the vehicle is not older than three years. Also, under NCB add-on, some insurers allow more than one claim.
Windshield protector add-on
A comprehensive motor insurance policy covers windshield of a vehicle. Yet, insurers provide an add-on for windshield amounting to Rs300-400. So, why should you go for this add-on by paying additional money? Actually, you should consider this option because in case your windshield gets broken in an accident or it is hit by, say, a cricket ball, and you file an insurance claim, you will not get your NCB at the time of policy renewal. But if you have taken windshield add-on, you will get paid for the replacement of the broken windshield by your insurer and at the same time, your NCB will continue to be valid for discount. For example, Royal Sundaram Own Damage (OD) cover premium for a swift Dzire ZDi car is Rs19,412. If you take the windshield protector add-on, you will have to pay only about Rs600, while you will be able to save up to Rs5,000 at the time of renewal of the policy assuming that you have a 50% NCB.
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Keep your car fit and do not make petty claims
Keep your vehicle in good condition at all times and drive carefully. Also, avoid filing insurance claims for petty dents or scratches because even one claim will debar you from being eligible to claim NCB. So, in case of an accident, check with a local mechanic what would be the cost of getting the vehicle repaired. If you think it is going to be less than the NCB, then pay from your pocket, otherwise, make an insurance claim. But if you have NCB protector add-on, make your claim as many times as allowed in your policy.
Neeraj Gupta: The writer is head of motor insurance, Policybazaar.com