Why Is It Important To Ask For Your No-Claim Bonus

author image Monday 11 January 2016, 16:01 PM Car-Finance

The car ownership experience is an immersive one, necessitating a great deal of involvement should you be looking to enjoy the car to the fullest without spending money where it isn’t necessary. Having a valid insurance cover is mandated by law and one can attract severe penalties for flouting the rule. This holds true both, for new cars as well as older ones. Not to mention the fact that they’d be exposing others to danger on account of their reckless act.

why is it important to ask for your no-claim bonus
why is it important to ask for your no-claim bonus

When it comes to auto-insurance, the one aspect that continues to be observed, is the sheer ignorance of the element called as the No-Claim Bonus (NCB). Simply put, the NCB is the insurer’s way of rewarding you for not having made a repair claim in the previous year of ownership. Read on to know more on why is it important to ask for your no-claim bonus.

The NCB can earn the owner substantial amount of savings, for simply having been careful enough. For example, when it comes to the purchase of new cars, owners can transfer the NCB from the old car to the new one. All you have to do is get the NCB certificate from the insurer by sending them the delivery note obtained from the car dealer. You then give the NCB certificate to the dealer and they’ll then adjust the new-car’s insurance premium accordingly. The great part is that the NCB certificate is valid for up-to three years.

In the case of old cars too, the depreciation factor sets in, and for each year that your NCB accumulates, your insurance premium for the next year reduces. Imagine the reductions that you would enjoy by the fifth year, should you avoid making a claim in the previous four years. Now you understand, why it is important to ask for your no-claim bonus!

However, there are certain instances where a claim becomes necessary. For example, any repair bill beyond a cut-off point that negates the benefits to be accrued from leaving the NCB intact would be a prime candidate. The type of bills that come with major mechanical repairs tend to fall in this category.

Playing it smart is always helpful when it comes to maximizing the fun in automobile ownership. So keep your eyes open on that NCB the next time.

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