As per the Motor Vehicle Act, it is mandatory for vehicle owners to have third-party insurance before taking their vehicles out on roads. However, it is always advisable to purchase a comprehensive car insurance policy with wider coverage. A comprehensive car insurance policy includes the mandatory third-party policy and safeguards you from the financial liabilities that may arise in case of an accident, theft, and loss or damage of your vehicle. After purchasing a car insurance policy, it is essential that you renew it timely. Also, when you renew car insurance, you should make a note of the No Claim Bonus. This can help you reduce the premium amount of your car insurance policy.
Let us have a look at the details of No Claim bonus:
What is No Claim Bonus?
- No Claim Bonus is a discount offered on car insurance premium to the policyholder for not filing a claim during the policy period. Therefore, for each claim-free year, you can earn the No Claim Bonus.
- The No Claim bonus may start from 20% and go up to a maximum of 50% over a period of 5 years. Availing the No Claim Bonus is one of the finest ways to reduce the premium of your car insurance policy while renewing it.
- Policyholders are eligible for a No Claim Bonus if they have not filed a claim in the past year. The rate of discount increases at a rate of 5% per year, along with the rise in premium rates.
How does a No Claim Bonus work?
- Vehicles of over and above 5 years of age can avail a discount of up to 50%, provided the owner does not make a claim.
- These discounts are initiated under “No Claim Bonus” when you have purchased a comprehensive car insurance policy.
- It is to be noted that if you filed a claim during the policy period, you won’t be eligible for the No Claim Bonus. In addition to that, if you fail to renew your car insurance policy within 90 days from the expiration of the existing policy, your No Claim Bonus will be terminated.
- If you happen to cancel your car insurance policy before the completion of the policy year, No Claim Bonus is not earned for that year.
- If you wish to transfer your No Claim Bonus from the old car to a new car, you would need a No Claim Bonus retention letter.
Knowing the nuances of the No Claim Bonus will help you make the most of it. It is essential that you make timely Bajaj Allianz car insurance renewal to avail the benefits associated with it.