The No Claim Bonus is a valuable reward a policyholder can earn for following safe and responsible driving practices. It is a crucial factor that reduces the premium when the policy is renewed. Moreover, the NCB also grows significantly over the period.
However, many car owners unknowingly lose this benefit due to avoidable errors. Understanding the common mistakes that affect NCB in car insurance can help you protect your long-term savings.
Mistakes that Can Affect Your NCB
Not Renewing Your Policy on Time
Many policyholders forget their car insurance renewal deadline, assuming a short delay will not impact their benefits. However, NCB is protected only if you renew your policy within the specified time frame. If your insurance lapses for more than 90 days after expiry, your accumulated bonus resets to zero.
This is why renewing your car insurance on time is essential. Even a small delay can cost you years’ worth of bonuses. Setting reminders or opting for automatic renewal notifications helps ensure you never miss the deadline.
Making Claims for Minor Damages
One of the most common reasons people lose NCB is filing claims for minor repairs. While a claim seems justified at the moment, it may cost you more in the long run.
For example, if repairing a scratch or dent costs ₹2,000, filing a claim will reset your NCB, resulting in a higher premium next year. Often, paying small repair bills yourself saves more money than claiming them.
Before filing any claim, assess whether it is truly necessary or if the repair cost is lower than your NCB savings.
Not Transferring NCB When Changing Vehicles
NCB is linked to you, not your car. So, when you sell your old vehicle and buy a new one, the bonus should be transferred to the new policy.
Many owners skip this step due to a lack of awareness.
As a result, they pay a higher premium on their new car despite having years of claim-free driving history. You can request an NCB certificate from your insurer and use it when purchasing insurance for your new vehicle.
Switching Insurers Without Requesting an NCB Certificate
When you switch insurers, your new company will not automatically apply your No Claim Bonus unless you provide proof. If you don’t submit your NCB certificate, your new insurer may charge the full premium without the discount.
This is a simple yet costly oversight. Always ask for an NCB retention certificate when moving to another insurer.
Undisclosed Modifications to the Car
If you install accessories or make performance modifications to the car without informing your insurer, you risk claim rejection. A rejected claim during the policy period, even if you later repair the car yourself, still counts as a claim event and may result in you losing your NCB.
To avoid this, inform your insurer about any changes to the vehicle so your coverage reflects the actual risk.
Not Using No Claim Bonus Protector
Many insurers offer an add-on that protects the NCB even when you make a claim. Although the add-on increases your premium slightly, it can help you save more by protecting your NCB.
Conclusion
Safeguarding your NCB in car insurance is one of the easiest ways to keep your premiums low year after year. A few simple habits, like avoiding small, unnecessary claims, renewing your policy before it lapses and keeping your documents updated, go a long way in protecting this benefit. Many insurers, including TATA AIG, also send timely reminders and make the car insurance renewal process straightforward, so you do not accidentally lose your NCB.
