Your flawless, claim-less driving fetches you a discount called no-claim bonus (NCB) on your car insurance premium year on year. If you have not raised any claim during a year, then you are entitled to a discount off the own-damage premium in the subsequent year.
For a claim-free year, you can get rewarded in the form of no claim bonus discounts up to 50%. But sometimes, accidents can happen on Indian roads, and they may cause damages to your car. If you make a claim in such a circumstance, you lose your accumulated No-claim bonus. It basically reduces to zero, whether it 20 percent in the previous year or 50 percent.
In case of minor damages you could have considered taking care of them on your own. A minor scratch, a small dent - the cost of getting such damages repaired is certainly less than losing on 50 percent no claim bonus discount, right?
But what happens in case of major damages? Well, you can't avoid NOT making a claim on the hefty repair costs. And you'd also lose your No claim bonus.
That is when the NCB Protector add-on comes in handy.
What is an NCB Protector?
To avail the no claim bonus, you should not make any claim for the whole year. However, the no claim bonus add-on allows for availing the bonus even if you have raised a prior claim. Typically, insurance providers allow policyholders to file a max of 2 claims per year and still have their NCB intact.
This way you will not forego your no claim bonus and will be entitled to a discount on the premium the subsequent year.
How does it work?
- The NCB Protector add-on cover protects your accrued no claim bonus.
- In the event of an own damage claim made for partial loss, total loss or theft of your vehicle, you need not forego your no claim bonus for making the claim
- The no claim bonus will not get crushed for the first two claims made during the year
- The policyholder will be eligible for discount the next year under the current slab of NCB
Is the NCB Protector Add-on worth?
No claim bonus is important when it comes to saving bucks on your premium amount. For example: If you didn’t claim for 3 years, in the fourth year you can get up to Rs. 4,200 in discount over a car insurance policy of Rs. 12,000. But if you make a claim, you lose that accumulated discount.
As a result you'd have to pay higher premium in the next year.
So, if you are someone living in or often travelling to an accident-prone area, you should consider paying additional cost of NCB protector cover. This will help you protect your NCB discount better.
However, if you are an infrequent driver or quite confident of your driving skills, then you may consider not buying it either. Buying this add-on for five years to protect your accumulated NCB of past five years, and still not making a claim is not worth it, right?
Avail this add-on based on your scenario and requirements. When deciding on whether to protect your no claim bonus, do remember that you are paying to protect your discount and not reduce the premium amount.