BusinessWire India
Noida (Uttar Pradesh) [India], April 30: Car insurance premiums vary for various reasons, among which the most common ones are No Claim Bonus (NCB) and Insured Declared Value (IDV). Knowing how these elements impact your car insurance cost can help you make better decisions when buying or renewing your policy.
What is NCB in Car Insurance
NCB in car insurance is a valuable benefit that insurance companies offer to policyholders who do not file any claims during the policy term. It allows you to save a significant amount on your insurance premiums.
What is IDV in Car Insurance
IDV in car insurance represents the highest amount an insurance company agrees to pay as compensation to you in the event of a total loss or theft of the insured vehicle. This payout applies when the car is untraceable or damaged beyond repair.
What is the Impact of NCB on Car Insurance
The NCB in car insurance is a valuable incentive that rewards responsible driving and helps reduce premium costs. Here is how it benefits you:
1. Substantial Savings on Premiums
If you do not make any claim, NCB accumulates with every passing year, thereby reducing your insurance premium significantly. Additionally, it increases with every claim-free year and can reach a maximum of 50%.
2. Reward for Safe Driving
Proper vehicle maintenance and careful driving ensure that you make fewer claims, earning you a decent discount during car insurance renewal.
3. Owner-Centric Benefit
NCB is linked to the owner, not to the vehicle. Thus, if you buy a new car, your NCB will remain on the new vehicle, and your earned discount will be transferred.
4. Transferable Between Insurers
Your NCB stays intact when you switch insurers, letting you keep your earned discounts with your new plan.
What is the Impact of IDV on Car Insurance?
The IDV is crucial in determining your car insurance cost and coverage. Here's how:
1. Maximum Compensation
The IDV sets the maximum claim amount for theft or total loss. A higher IDV offers a larger payout, while a lower IDV means less compensation.
2. Risk Assessment
Insurers assess the risk associated with your car through IDV. A higher IDV raises your premium, while a lower IDV lowers both your premium and coverage.
3. Claim Settlement
The IDV also influences the costs for repairs and part replacements. The compensation you receive for damages is calculated based on the IDV, making it essential to set it correctly.
4. Balancing IDV
Sticking to the right balance when declaring your car's IDV is essential. Choosing a high IDV raises your premium without enough benefit, while a low IDV risks leaving you underinsured.
NCB and IDV are vital in determining your car insurance cost and coverage. While NCB rewards safe driving with substantial premium discounts, IDV directly influences the maximum claim amount and risk assessment. Understanding how both these factors work is essential to making the most of your car insurance policy.
(ADVERTORIAL DISCLAIMER: The above press release has been provided by BusinessWire India. ANI will not be responsible in any way for the content of the same)
