Outlook Money
NCB incentivises car policyholders to be safe drivers. It is like getting NCB for not using the health cover.
If a claim is not lodged for an entire year, the insurer gets a discount during the renewal of the car insurance premium the next year.
It starts at 20 per cent and ends at 50 for no claims being made for five years. This means the longer one goes without making a claim, the lesser is to be paid for the renewal.
If the claim is made for any of the own damages of the person, NCB resets to nill. No partial claim is retained.
IDV is defined as the amount that the car is currently worth. It is the maximum the insurer pays for the vehicle if stolen or ruined.
There is more financial protection with higher IDVs, but it increases the premium.
If a person chooses a lower IDV to receive a lower premium, it costs a lot if a large claim has to be made.