It’s Not My Fault! Why Deduct My NCB?
Isn’t that a question you normally hear? Well, to me, anyway. NCB - No Claims Bonus, is an incentive offered by Insurers to motor policy owners when there is no claim made on the motor policy for the preceding year. As an illustration, assuming you bought a new car. You will have to pay the full insurance premium for the first year of ownership. If there is no claims made in the first year, the Insurer will offer the policy holder a 25% discount off the basic premium for the second year. It will increase on a year to year basis up to 55% discount.
Now, if you read carefully, you will notice that this is a No Claims Bonus. It is not a No Fault Bonus. Many people have the mistaken belief that as long as an accident is not due to their fault, they will still have their No Claims Bonus retained for the subsequent year. However, this is not so. As the name suggests, the bonus is only given if there is no claim/s. A claim could very well be lodged by the opposite motorist who was involved in an accident with the policy holder’s car. The accident could be wholly or partly due to the fault of the opposite motorist. However, because the insurer needs to handle this claim on the policy holder’s behalf, the No Claims Bonus is thus forfeited for the following year and the policy holder will have to start earning back his bonus as if he bought his car for the very first time.
Of course, you can always preserve your No Claims Bonus if you choose to handle the opposite motorist’s claim personally and completely waive the insurer’s obligations under the policy to meet the claim. However, the risk is potentially high and it might not be economically viable to do so.
comments
One Response to “It’s Not My Fault! Why Deduct My NCB?”
You got something to say?
[...] I mentioned that NCB (No Claims Bonus) [also known as NCD - No Claims Discount] will be forfeited in the event of a claim being made or arises during the material policy [...]