IS NCB PROTECOR ADD-ON A WASTE OF MONEY?

When it comes to insuring your car, it’s often recommended to go for the extensive coverage with all the relevant features and riders that can provide complete protection to you and your priced possession. However, many of us always have a question back in our mind that whether it’s worth that extra charge or not? For example, protecting a no claim bonus- worth the extra premium or not?

NCB Protector Add-on

NCB refers to no claim bonus which is a form of reward offered by the insurance companies for having claim-free record in each policy year. No claim bonus can be availed in the form of discount on renewal premium after completing the first year of policy period without any claims. NCB discounts ranges from 20{3ab7c693efb495afa9cfa5ed3bae9ca6a83fc9331ececd25f4b8df6798b4d127} on completing of first claim free year to 50{3ab7c693efb495afa9cfa5ed3bae9ca6a83fc9331ececd25f4b8df6798b4d127} on completion of 5 claim free years. But, one single claim can bring down your long accumulated and valuable no claim bonus discount straight a way to zero. This is where NCB protector add-ons comes into picture and plays a significant role.

As the name implies, NCB protector add-on helps you retain the accumulated NCB discount even after making a claim. To ensure your no claim bonus stays intact, you can opt for NCB protector add-on at little extra cost over the premium. Let’s understand this with an example:

Mr. Suresh has accumulated a no claim bonus discount of 35{3ab7c693efb495afa9cfa5ed3bae9ca6a83fc9331ececd25f4b8df6798b4d127} after 3 years of incident-free driving. That means, he is eligible for no claim bonus discount of 35{3ab7c693efb495afa9cfa5ed3bae9ca6a83fc9331ececd25f4b8df6798b4d127} on renewing his car insurance. But, before the renewal quote arrives for the fourth year, Suresh unfortunately meets with a minor accident. On the way back home from office, his car banged into auto causing dent in a bumper and some other minor damages to car. He gets compensation from the insurer after making a claim. He still retains his 35{3ab7c693efb495afa9cfa5ed3bae9ca6a83fc9331ececd25f4b8df6798b4d127} NCB discount as he had opted for NCB protector add-on in his car insurance. In this case, let’s say insured declared value of his car is Rs. 8 lakh. He can make claim up to maximum of Rs. 2.8 lakh without losing on 35{3ab7c693efb495afa9cfa5ed3bae9ca6a83fc9331ececd25f4b8df6798b4d127} NCB discount which he had built up over the years.

Is NCB Protector Cover Worth the Money?

After a few incident-free years, many people tend to say that ‘I am a cautious driver’ and they feel there is no need to protect the NCB accumulated. But, it’s vital to realize the fact that unfortunate incidents do happen on road even after being cautious. There are also people who strongly believe in safeguarding their valuable no claim bonus even if it comes at some extra cost.

But, is it really worth that extra cost year on year?

Well, there is no straight answer to this question. It varies from case to case, insurer to insurer. Every insurance company has a different approach when it comes to offering a discount and pricing the insurance policy. Likewise, every insurer has a different approach for NCB protector add-on which may also vary based on the type and extent of claim that you make. Here are few important points to note on NCB protector add-on

• Some insurers may protect and retain your no claim bonus after a claim and some may significantly reduce it instead of making zero. Hence, it’s important to read through the exclusion clause carefully
• NCB protector only preserves your no claim bonus and helps you avail a discount on later year premium. This does not means your premium will not be hiked after a claim. Obviously your premium will rise after a claim as there are other factors that impact the pricing.
• Some insurers may restrict the benefit based on the number of claims that you make. For example, you may not eligible for this benefit after making maximum of two claims in a year.
• Some insurers do not provide this cover for older four wheelers. Most of the insurers restrict this benefit for the first 3 or 4 years.

Conclusion

To sum it up, NCB protector add-on comes with its own advantages and disadvantages. To include or not to include it in the main policy has to be purely a need-based decision. If you choose to opt for NCB protector, all that you need to do is shop around. Compare the policy quotes with this add-on and without the add-on to see how much losing on the no claim bonus can cost you. No claim bonus accumulated for years are really valuable. Hence, do cost-benefit analysis to go with the right policy.