How to Transfer NCB When Buying a New Car Insurance Policy?

As per the Motor Vehicle Act 1988, every vehicle owner in India must insure their car at least with third-party insurance. However, responsible vehicle owners always opt for comprehensive coverage, which covers both the third party and the damage caused by an accident.

Besides, a comprehensive policy comes with various perks, including No Claim Bonus (NCB). Policyholders can transfer NCB while purchasing a new car insurance policy and reduce the premium amount. How can you do this?

Keep reading to learn about NCB, its benefits, the transfer procedure while purchasing a new insurance policy, and more!

What is No Claim Bonus in Car Insurance?

NCB car insurance is a bonus or reward insurance companies provide to the insurers upon filing zero claims during the tenure. You can use this bonus as a discount on the premium amount of the next policy.

The bonus percentage varies between 20% and 50% depending on the number of claim-free years. For instance, policyholders making zero claims for a year can receive an NCB of 20%; after two years, the percentage will increase to 25%. If you make zero claims for five consecutive years, you can avail 50% NCB.

How to Transfer No Claim Bonus?

Transferring your No Claim Bonus when buying a new car insurance policy involves the following easy steps:

1.   Inform the New Insurance Company

While purchasing a new car insurance policy, provide your previous insurance details to help verify your NCB status.

2.   Get your NCB Certificate

Next, you must submit Forms 29 and 30 (buyer-seller agreement) and a letter requesting an NCB transfer from the previous insurer.

3.   Submit the NCB Certificate to Your New Insurer

Once you get the NCB certificate from the existing insurance company, you need to submit the certificate to the new insurer. This certificate will allow them to apply for the appropriate discount based on your accumulated NCB.

4.   Purchase a New Insurance Policy

Once you’ve provided all necessary documentation and confirmed the transfer of your NCB, you can buy a new car insurance policy. Ensure that all details are accurately filled out in the new policy documents.

What are the Documents Required to Transfer NCB to a New Insurer?

You need to submit the following documents to the insurer for transferring NCB to the new insurance company:

• NCB transfer application form
• Form 29 and 30 (Sales agreement)
• A copy of the car insurance policy
• In case of purchasing a new car, submit a copy of the booking receipt
• In case of selling an old car, submit a copy of the ownership transfer or old registration certificate

What are the Benefits of NCB?

Here are some of the notable benefits of Non-Claim Bonus:

●      Positive Rewards

It rewards responsible vehicle owners who complete the policy period without making any claim.

●      Savings on Car Insurance Premium

The accumulated No-Claim Bonus helps save a minimum of 20% on your annual premium. Besides, it reduces the insurance premium when you transfer it to the new insurance policy.

●      Easy to Transfer

Policyholders can easily transfer the NCB while purchasing a new insurance policy and availing themselves of the benefits.

Things to Remember When Transferring NCB

Here are some of the key points to remember while transferring NCB:

●      Ownership

The NCB is associated with the individual policyholder and not the car. Thus, when you sell an old car, you can retain the ownership of the insurance policy and the associated NCB.

●      Eligible

You can claim NCB only if you have completed a full policy term (minimum 12 months) without making a single claim.

●      Validity

It’s essential to act promptly when transferring your NCB. If you delay applying for a new policy or fail to provide the necessary documentation within a reasonable time frame after selling your vehicle, you risk losing your accumulated bonus.

Most insurers recommend completing this process within 90 days of selling or transferring ownership of the old vehicle.

What are the Benefits of Transferring NCB?

Transferring your No Claim Bonus not only helps reduce premiums but also serves as an incentive for responsible driving behaviour. Here are some benefits:

●      Financial Savings

Drivers can save on premium costs by transferring an accumulated NCB from a previous vehicle insurance policy to a new one.

●      Encouragement for Safe Driving

The existence of an NCB encourages drivers to adopt safer driving habits, as they know that making no claims will result in financial benefits.

Transferring a No Claim Bonus while buying a new car insurance policy is advantageous for a vehicle owner in many ways. One can follow the right steps and procedure to transfer the NCB and save on their premium for a comprehensive car insurance policy.

So, if you plan to purchase a new car insurance policy, don’t miss transferring the accumulated No-Claim Bonus.