covers your car against risks like theft, accident, explosion etc.
Owning a car is a matter of prestige for many people in India. Sporadically, escalating rise in number of vehicles on road has increased chances of road accidents. Therefore, buying a car insurance, to keep up your prestige, becomes a must. However, with Inflation showing magnified effects on cost of fuel and maintenance, adding yet another cost like car insurance Premium can make you take backward steps. As a smart consumer, you can look for No Claims Car Insurance to get a cheaper deal.
No claims Bonus is a special type of discount premium which is being given to those safe drivers who have not reported any car insurance claims. In simple words, it is a reward given for making no claims. The Policy holder gets benefit of no claims bonus in the following year with a discounted car insurance premium. With every year, the no Claim bonus amount gets added up. However, there is a limit of nine years to this time. Also, limit exists for maximum discount that can be provided.
In India, there have been a limit drawn on the amount of discount availed to car insurance policy holder for no claims. This varies from 20% to 50%. For instance, if there is one claim free year, the policy holder is entitled to get a bonus of 20%. In next consecutive no claims year, the discount may rise to 25%. A discount of 35% is rewarded in the 3rd consecutive year and 45% in the 4th. There is a maximum reward of 50% discount in case the car insurance policy holder does not make a claim for five consecutive years. However, all the discount and bonuses paid depend on the terms and conditions of the car insurance company.
For example, if you have a car insurance policy whose annual premium is Rs. 10000, you can get cashless claims service from an authorized network garage in case of an accident. If you fortunately met with no accidents, after the first year of no claim, the policy holder is entitled to get a discount of Rs. 2000 on the premium and will have to pay just Rs. 8000 as premium. Similarly, the discount will be Rs. 2500, Rs. 3500 and Rs. 4500 for the second, third and fourth consecutive year, respectively. Again, in the fifth consecutive year the discount will amount to Rs 5000. In case you make car insurance claims anywhere in between this period, your discount will get forfeited and you will again have to pay the same Rs. 10000 as annual car insurance premium.
Many a times, policy holder do not claims for the damages caused due to small accidents. This is to save the no claims bonus which could be higher than the actual loss. This way, car insurance companies successfully discourage hassles of frequent small claims. The benefit also exists in case you opt for cashless claims.
Under this you get benefit of getting your damaged repaired from any authorized network garage. An important point to note here is that car insurance policy should be renewed within 90 days of the date of expiry of the car insurance policy for keeping the no-claims bonus benefit active.