We have selected and offered the best insurance company in India in which you can renew your vehicle insurance from where it was at a very low premium. However, do not choose an insurance company considering only the lower premium. There are certain conditions to keep in mind when renewing an insurance policy online.
NCB percent (No Claim Bonus)
If the NCB percentage is not selected correctly. When your vehicle is involved in an accident, your car accident insurance claim will be rejected on this basis. This will vary from company to company.
What is a No Claim Bonus or NCB?
No Claim Bonus or NCB is a reward given by an insurance company to an insured for not raising any claim requests during a policy year. The NCB is a discount ranging between 20%-50% and is given to the insured while renewing a policy. The NCB discount is offered on the premium amount during renewal. This discount is transferable and can be transferred even if the policyholder buys a new vehicle.
How to calculate No Claim Bonus?
The No Claim Bonus is applicable from the second year of the policy period. After the first year, when no claim has been raised, your insurance provider offers you a discount of 20% on the premium amount. This begins in the second year, and this can go up to 5 consecutive years. To understand the working of a no claim bonus calculator, refer to the following table:
When does the No Claim bonus feature gets canceled?
The No Claim Bonus feature stops working under the following scenarios:
- If a claim request is raised, then the NCB will be scrapped.
- If a policy is not renewed within 90 days of expiration, then also the NCB discount becomes invalid.
What are the benefits of the No Claim Bonus?
- No claim bonus allows you to transfer the discount from one vehicle to another under the same owner.
- During renewal, the No claim bonus can also be transferred from the main owner to another.
Terms and Conditions of No Claim Bonus:
If you’re selling your vehicle and buying a new one, make sure you transfer the No Claim Bonus to the new vehicle. At the time of the transfer process, the insurance company will issue a certificate and there are also chances that the premium could be reduced. However, this decision could be at the discretion of the insurance company.
No Claim Bonus will not be offered on only third-party insurance cover. It is only offered on your own damage cover or comprehensive policy.
A perfect rating of the vehicle (IDV)
Even if the value of the vehicle is increased
The valuation of the vehicle market will be claim settling.
The value of the vehicle should not be underestimated in order to reduce the insurance premium money
The total loss of the vehicle to the insurance company’s claim is settled on an IDV basis
It is therefore very important to choose the right IDV.
What is IDV?
IDV refers to Insured Declared Value and is the maximum sum assured fixed by the insurer that is offered in case of theft or total loss of a vehicle. In short, IDV is the current market value of your vehicle. It is usually estimated based on the manufacturer’s listed selling price of the model and variant of the vehicle (including additional accessories) at the beginning of the car insurance policy. It is determined after adjusting depreciation for every year. In case your four-wheeler is stolen or ends up badly damaged to an extent that it is beyond repair, the car insurance claim amount payable is calculated based on IDV. This is why it is very essential that your vehicle is insured for the right IDV. One should utilize a car insurance calculator for the said purpose.
Why is the IDV of my car important?
There are 2 big reasons why the IDV of your car is important. First, it is the maximum amount of compensation you will receive in case of theft or if your car is damaged beyond repair. Second, the IDV of your car directly affects the premium of your insurance policy. A higher IDV results in a higher premium and vice versa.
With this knowledge, many car owners think about lowering their IDV to enjoy a reduced premium. However, you should note that, in case of theft or total loss of your vehicle, a lower IDV could also lead to a lower payout. This can be extremely disappointing. Therefore it is important you use an IDV calculator and set the correct IDV for your vehicle when buying or renewing your car insurance policy.
How is the IDV of your vehicle calculated?
Our insurance cum IDV calculator uses an advanced algorithm to check the IDV of your car. It takes several factors to accurately calculate the value of your vehicle. However, if you wish to estimate the IDV of your vehicle on your own, you can use these 2 simple formulas:
If you have no added accessories:
Your car’s IDV = car’s ex-showroom price – depreciation.
If you have added accessories:
Your car’s IDV = (car’s ex-showroom price – depreciation) + (cost of accessories – a depreciation of the accessories)
How is the cost of depreciation calculated?
The rate of depreciation plays an important role when calculating your IDV. The value of your vehicle reduces a little bit every year. This annual decrease in the valuation of the vehicle is known as depreciation. The rate of depreciation has been standardized & stipulated by The Motor Tariff Act – it is as follows:
Therefore, if your car is less than 6 months, the IDV of your vehicle will be roughly 95% of its ex-showroom price. Once your car completes 6 months, its IDV will be around 85% of the ex-showroom price. Similarly, the estimated IDV will be 80% of the ex-showroom price for a vehicle that is between 1 and 2 years old – so on and so forth! However, once your vehicle crosses the 5-year mark, the insurance company and the policyholder have to mutually agree on the IDV. If you want to check the IDV of your car, you can use our online IDV calculator instead of racking your brains with all this mental calculating.
5 Factors that affect the IDV of your vehicle:
The IDV of your vehicle is decided based on several factors, some of these include:
Type of car: There are different types of cars available in the market. These include hatchbacks, sedan, SUVs, MUVs, etc. Each of these types of cars will have a different value. For example, SUVs tend to have a higher value than sedans. Similarly, sedans usually have a higher value than hatchbacks. Therefore, the type of car is one of the first factors that influence the IDV of your car.
Make & model: The make and model also play an important role in deciding the IDV of your vehicle. This is because different car brands have different values, even if they are the same types of car (i.e. hatchback, sedan, etc.).
Age & depreciation: This is one of the most important factors when calculating the IDV of your vehicle. Your car starts to depreciate as soon as you drive it home from the dealership. And, the older it gets, the more it depreciates in value. Therefore, an older car will have a lower IDV as compared to a new one, even if it is the same type, make, and model of car.
Place of registration: The location where your car is registered also plays a minor role in deciding its IDV. This is because the ex-showroom price varies between cities.
Accessories: Lastly, if you have added any accessories to your car, then their depreciated cost can also be included when calculating the IDV of your vehicle.
Our car insurance cum IDV calculator takes all these factors into consideration and provides you with a quick estimate of your vehicle’s value. All it takes is a few details and a couple of seconds of your time– you will have the IDV of your car on your screen.
When is the IDV payable?
Claims that involve the IDV of your vehicle are quite rare. However, it is still important to set the right IDV when you buy and renew a car insurance policy. This will ensure that your premiums are in check with the valuation of your car. But more importantly, it will ensure that in case your IDV is required for the calculation of a claim amount, you will receive fair & satisfactory compensation. Here are some instances
where the IDV of your vehicle claims payable:
Theft of the vehicle: This is one of the most common claims where the car’s IDV is payable. Theft is considered a total loss and therefore the insurance company has to provide the current market value (IDV) to the insured. This compensation will help offset the financial impact of the stolen vehicle.
Total loss of the vehicle: The other kind of claim where the IDV of the vehicle is payable is when the repair cost exceeds its insured value. Such damage could be a result of an accident, an act of God such as earthquakes, or a man-made calamity such as riots. Here, the insurance company will provide the policyholder with the IDV of the vehicle. This will help reduce his/her contribution towards the purchase of a new vehicle.
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