How to transfer no claim bonus of your motor insurance policy to a new car?

A new car insurance policy comes with the benefit of a no-claim bonus. This is a reward that the insurance company offers to the insured vehicle’s owner for safe driving. As per the Insurance Regulatory and Development Authority of India (IRDAI), the no-claim bonus is the reward owned by the insured party and not the vehicle. Thus, the vehicle owner can transfer the no-claim bonus to a new car.

What is a no-claim bonus in car insurance?

The no-claim bonus in car insurance is a discount insurance companies offer you for not filing any claims within that specific policy tenure. This bonus is a reward for safe and claim-free driving and an incentive to drive carefully and thereby avoid accidents. Here are some important points to know about NCB:

1. A no-claim bonus discount can only be availed of the premium of your own damage coverage under your car insurance policy.

2. NCB benefits can be accumulated for up to five consecutive years without filing any claim. It increases every year from 20% in the 1st year to a maximum amount of 50% at the end of the fifth year.

3. NCB is valid for a specific period, even if you don’t own a car for a while. NCB can typically be retained for up to 90 days after the expiry of the previous policy.

4. The NCB can be transferred from your old vehicle to a new vehicle if you sell your old one and buy a new one, as long as the new car insurance coverage is in the same name.

5. The NCB is typically reset to zero at the next renewal if you claim during a policy period. However, if you avail of an ‘NCB Protector’ rider, you can make a limited number of claims without affecting your No Claim Bonus.

How do you transfer NCB to your new car?

Transferring the no-claim bonus from your old car to a new car involves some simple steps.

Get a no-claim bonus (NCB) certificate

Once you sell your old car, you need to obtain a no-claim bonus (NCB) certificate from your car insurance company. NCB certificate is a letter that confirms the accumulated no-claim bonus in your name, specifying the percentage of bonus you have accumulated over the years.

Get registration details for a new car

Once you purchase a new car, get the important registration details in order to transfer the no-claim bonus. When you purchase insurance for your new car, inform the insurance company about your existing NCB and provide them with the NCB certificate obtained from your previous insurer.

Transfer no-claim bonus to a new car

The new insurer will verify the NCB certificate and apply the corresponding discount to your new car insurance premium.

Submit the documents

Submit all the relevant documents as mentioned below for the transfer of NCB:

• NCB certificate copy

• Request letter to transfer the NCB to a new car

• The old car’s sale agreement copies

• Registration certificate for the new car

The insurance company verifies all the documents and then issues a new car insurance policy for a new car with the applicable NCB discount.

Conclusion

To conclude, a no-claim bonus serves as an effective tool for encouraging safe driving habits and reduces the overall cost of insurance. With a simple process, you can effectively transfer your NCB from your old car to your new car, thereby enjoying a reduced premium on your motor insurance.