NCB or No Claim Bonus is a benefit that accrues for the insured in the event of no claims made during the period of the previous vehicle insurance policy. As per the current rules in India the range of NCB is from 20% on the Own Damage Premium, and increases to 50%, which is the maximum amount of bonus possible. The NCB is lost in the subsequent period of a car insurance policy if the insured lodges a claim during the current policy period.
Rules Governing Vehicle NCB Transfer:
As per the IRDA, the NCB belongs to the person insured and not the vehicle. This means that when a vehicle is transferred to another person, it is possible to transfer only the insurance policy but not the No Claim Bonus. The person buying / receiving the vehicle would need to pay the differential amount for the NCB for the remaining period of the policy. If the original owner buys a new vehicle, she or he can use the NCB for the new vehicle.
To make a transfer, the original vehicle owner must submit the buyer-seller agreement – Forms 29 and 30, with a letter stating the request to transfer the NCB from the existing insuring company. The insurer would need to issue an NCB certificate, which is valid for a period of 3 years. This certificate must be submitted to the new company insuring your vehicle. When buying car insurance online, the certificate would not be required – just a declaration from the insured would suffice. Under no circumstance must the insured hide any facts such as claims made on the insurance policy – the new insurer is sure to verify the details from the previous insurer.
Getting the Most Out of the NCB:
When buying a vehicle, people negotiate extensively with the dealer on aspects such as discounts, freebies, and financing options. However, the insurance portion seems to take a backseat and is often overlooked. It is however, possible to save some amount on the premium you pay for your vehicle insurance, using the NCB.
- When transferring your old vehicle, ensure that ownership is what you transfer and keep a copy of the new entry in the Registration Certificate (RC) book for the purpose of vehicle insurance.
- Upon receiving the delivery note, send a copy to the insurer, based on which they would send the NCB certificate or a holding letter. The letter would be valid for 3 years.
- This NCB must then be sent to the dealer from whom you have bought your new car. This transfers the NCB to the new car insurance
- Remember to check the various options for vehicle insurance online. You can save a lot of money and get the best deals by making online comparisons.
- Try not to switch insurers before the duration of the policy since you would have to give up the NCB for the year
- At the end of the term of the car insurance, the current insurer should provide proof of no claims, which the insured must then provide to the new insurer
Transferring the NCB of your Company Car
The NCB on a company car is transferable to another car only if the individual is named as the insured on the insurance policy from the company. The good thing about company car insurance policies is that if there were a build-up of NCB, the insurer would only need a confirmation from the employer.
A No-Claim Bonus is extremely beneficial and a top way to save on the premium due for car insurance. Read all the conditions carefully to understand how best to use and transfer the NCB due on your vehicle insurance.