As the name suggests, a “no-claim bonus” or NCB is a benefit or a reward for the insurance policyholders who have not claimed insurance during the preceding year of coverage.
Advantages of no-claim bonus
The biggest advantages of a no-claim bonus are as follows:
- It plays an important role in lowering your annual insurance premium. For example, if you do not make any claim on your car insurance, your insurance provider is not required to pay out any money. It specifies that you are a safe driver and therefore cheaper to cover. It will lower the premium for the following year.
- The no-claim bonus is a reward that stays with you. For example, if you were to sell your car, it becomes applicable to the next car you purchase.
- The no-claim bonus is easily transferable if you shift from one insurance provider to another.
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