A No Claim Bonus (NCB) is a kind of reward granted to car owners by vehicle insurance companies. It is offered to car insurance policy holders who don't take any claim during the policy tenure. This reward consist of a discount on the car insurance premium that is applied at the time of policy renewal in the following year. The discount percentage of NCB ranges between 20%-50% depending on the number of claim-free years.
Benefits of NCB
Earn rewards - NCB is considered as a proof of being a responsible driver and keeping your car in a proper condition. Thus, the policyholder can earn rewards through NCB by not filing for claims during the previous policy tenure.
Transferable - The NCB can be easily ported to another car in case you change your vehicle. Also, it can be transferred from one insurer to another if you decide to purchase the policy from some other insurance company.
Lower Premiums - NCB helps you to earn at least 20% of your insurance premium yearly. This discount percentage is used to reduce the premium for NCB at the time of policy renewal.
Granted to policy holders - A big advantage of NCB is that it is granted to policy holder not the car. Whether you buy a new car or sell an old one, NCB remains with you as long as you are renewing insurance policy. It cannot be transferred to new owner.
How to Transfer NCB to new Car Insurance
The process of transferring NCB to new car insurance policy is very easy. It depends on whether the policyholder buying new car insurance online or offline.
In case, you are buying your new car insurance offline or via an agent, you'll need to submit the below mentioned documents.
- Contact your old insurance provider
- Submit all your documents including Forms 29 and 30 along with a letter requesting the transfer of your NCB.
- The insurer will issue a NCB certificate
- Submit the NCB certificate to new insurance company
- The new insurer will transfer the NCB.
If you are planning to buy a new car insurance online, you don't need to any of this, all you need to do is to inform the new insurance company about the correct NCB, name of the previous insurer and old policy number and the new insurer will manage the rest of the process.
- Transfer application
- Photocopy of the car insurance
- Form 29 and 30
- Copy of transferring old vehicle (in case of sale of old vehicle)
- Copy of delivery note (in case of sale of old vehicle)
- Copy of booking receipt ( in case of buying a new vehicle)
- NCB certificate
When is NCB terminated?
NCB is terminated in two situations:
- If you make a claim during a policy year, benefit of NCB will not be given next year.
- If the existing policy doesn't get renewed within the 90 days from the date of expiry.
NCB is not applicable to third party insurance
It is a benefit that is only offered with the Own Damage cover. It means it is not applicable on third-party car insurance. Similarly, it is not applicable on add-ons as well. However, you can consider NCB protector as the only add-on which can be opted.
Validity of proof of NCB
The proof of NCB is generally valid for 2 years. So, if a policyholder don't have his own policy for more than 2 years or is off the road for any reason, he/she will have to start from scratch the next he takes out an insurance policy.
Can NCB be protected?
The insured can protect the accrued No Claim Bonus, even if a claim is made, by paying an extra amount. This expense will not be exactly the discount accessible after 5 years of no claim. Paying for no claim bonus protection doesn't keep the cost of the policy from increasing later on.
How do you know how much of NCB you are eligible for?
- If you have not made a claim in the last 1 year, then you'll get a discount of 20% on your Own Damage or OD premium
- If you have not made a claim in 2 consecutive years, you get a discount of 25% on your Own Damage or OD premium
- If you have not made a claim in 3 consecutive years, you get a discount of 35% on your Own Damage or OD premium
- If you have not made a claim in 4 consecutive years, you get a discount of 45% on your Own Damage or OD premium
- If you have not made a claim in 5 consecutive years, then you'll receive a discount of 50% on your Own Damage or OD premium.
Hope this will help you understand and leverage the benefits of NCB.