All of us are aware that motor vehicle insurance policy is a policy that is imposed against vehicles i.e four wheelers, commercial trucks, two-wheelers, and other road vehicles for financial loss in case of unfortunate situations. Have you heard the benefits of the No Claim Bonus?

Let us learn from the basics. Motor vehicle insurance consists of two major parts, Own Damage (OD) cover and Third-Party liability cover. Own Damage policy covers the damage caused to an insured vehicle that occurred by an accident whereas Third Party liability provides the legal liability to the policyholder arising due to the damage caused by an accident to the third-party property or third-party injury.

Know the truth that No Claim Bonus is neither a policy nor an add-on cover but a reward a car owner receives from an insurer if he/she does not raise any claim in a policy year. This is commonly referred to as No Claim Bonus (NCB). Statistics have clearly shown that the NCB permits the policyholder to save up to 20 to 50% conditioned upon the number of years without redeeming the insurance claim.

The benefits of the NCB are vast and highly valuable since it is considered proof that the policyholder is a responsible driver and takes diligent care of the insured vehicle. As a reward, if the insurance claim has not been availed throughout the policy period, then the policyholder is eligible to receive a discount on the premium, which means a lower premium cost to the insurance cover.

           The policyholder need not worry about buying an extra or another vehicle because of the credential he/she has retained for NCB. The truth is the NCB credit remains with the policyholder even on the decision on buying or selling the insured vehicle. In simple, the vehicle can be transferred but NCB cannot.