By We all reach a point where we feel like upgrading our car. There could be a variety of reasons behind that like safety concerns, rising maintenance and fuel costs, the need for more space, technological advancements and aesthetic preferences to list a few.
When you buy a new vehicle, you need to get it insured before hitting the roads. In scenarios like this, most vehicle owners wonder how they can transfer their accumulated no claims bonus discount of existing four-wheeler insurance policy to the new vehicle.
Let’s understand the basics of no claim bonus in car insurance and the process to transfer no claim bonus.
What is No Claims Bonus in Car Insurance?
The No Claim Bonus (NCB) or NCB insurance is a valuable perk provided by insurers to reward policyholders for not filing any claims throughout the policy tenure. This benefit serves as a recognition of responsible behaviour and leads to discounts on future premiums.
It acts as one of the biggest discounts offered on car insurance. This discount can reach up to 50% of the premium amount if the claims are not made for 5 consecutive years.
How to Calculate NCB in Car Insurance?
The NCB for your four wheeler insurance after the first claim-free year is 20%. It adds up for every claim-free year until five consecutive years when it reaches 50%. Using this discount, you can avail up to 50% discount on your insurance premiums for not filing any claim.
| Car Insurance Policy Period | Discount |
| 1st claim-free year | 20% |
| 2nd claim-free year | 25% |
| 3rd claim-free year | 35% |
| 4th claim-free year | 45% |
| 5th claim-free periods | 50% |
How to transfer No Claim Bonus (NCB) ?
Transferring NCB to new car and all of its benefits from an old vehicle is quite a simple and straightforward process.
NCB is rewarded to the vehicle owner, aka, the policyholder and not to the car itself. It is possible to transfer no claim bonus since NCB belongs to the owner and can be carried over to any car they choose to drive. Here is a simple process to do so:
Earn NCB Points
To earn NCB you have to avoid raising claims. It means that you can avoid filing claims for minor repairs and replacements in your car. For that, you have to drive safely, follow the rules and be well aware of the policy terms.
But if the mishaps are big enough and the financial burden of the repair is burning a deep hole in your pocket, you should definitely raise a claim.
Now, to transfer no claim bonus, you are required to get an NCB certificate.
Getting the NCB Certificate
An NCB certificate is a document provided to you by your old car insurance provider to start the actual transfer process. This document is essential for facilitating the transfer of your No Claim Bonus (NCB) status to your new four-wheeler insurance policy. It acts as proof of the NCB acquired to date.
Just provide this document to the insurance policy provider of your new car. The insurance provider calculates the discount and adjusts it from your new policy premium.
Can No Claim Bonus Terminated?
The NCB might also be terminated in some severe scenarios as follows:
- If you make a car insurance claim within the 5 policy years.
- If you don’t renew the vehicle policy within 90 days of its expiration date.
- When you don’t transfer the NCB to the new insurer or the vehicle within a certain period of time.
No-Claim Bonus Protection Cover Add-On
While NCB is a celebrated reward, it becomes quintessential to claim insurance to cover the significant damages to your vehicle during unforeseen scenarios. In such cases, It might be disheartening to lose out on your hard-accumulated NCB for years for that single claim.
With some credible four wheeler insurance providers like TATA AIG – you can buy a No-Claim Bonus add-on or protection cover. This add-on is designed to safeguard your no-claim bonus, allowing you to keep its benefits even if you make a claim during the policy year.
Note: This no-claim bonus protection cover add-on will only be applicable for a single claim during the policy year.
Conclusion
All in all, no claim bonus is indeed a reward to look forward to as a car owner. When you decide to buy a new car, why lose out on your acquired NCB? Transferring NCB to a new car is also a hassle-free process.
It not only provides premium discounts but also encourages safe and sound driving.
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