Incredibly Useful Information About No-Claim Bonus In Motor Insurance

By BankBazaar | September 18, 2017

All About No Claim Bonus In Motor Insurance!

In case you didn’t know, insurance is mandatory for all vehicles, almost everywhere. Why? Because, motor vehicles can pose a potential threat to both living and non-living things, even if they’re sitting idle. Therefore, insuring all motor vehicles has been made mandatory to make the owner legally responsible for the vehicle. This makes the owner liable for any damages caused by their vehicle in any form whatsoever.

Additional Reading: How To Choose The Right Car Insurance Policy

A No-Claim Bonus or NCB is popularly known as a good way to ensure discount on Car Insurance premium as a reward for effective and safe driving. There are, however, many misconceptions about NCB and its eligibility, especially in case of selling of the vehicle or purchasing a new vehicle. Let us take a look at some of the common questions about no claim bonus and their answers.

Additional Reading: Motor Insurance Price Hike: Making The Best of The Situation

What Is No Claim Bonus?

No Claim Bonus commonly known as NCB is a benefit available to all motor insurance policyholders allowing them a reward for safe driving. As the term suggests, no claim bonus makes the policyholder eligible for a discount or bonus on the insurance premium if there are no claims lodged against it and is awarded for the subsequent years at the time of policy renewal. It is offered on the own damage portion of the motor insurance policy and in case the vehicle owner only opts for a third party insurance, he or she would not be liable for a no claims bonus.

What Percentage Discount On Premium Can I Get Using No Claim Bonus?

No claim bonus is the same offered by every insurance service provider. The bonus for cars and two-wheelers starts at a 20% discount at the second year/renewal of the Car or Two-wheeler Insurance policy and can go up to a maximum of 50% in the sixth year. In this day and age of rising inflation, any discount on insurance premium is welcome for policyholders, thereby making No Claims Bonus an essential part of every motor insurance policy.

Is There A No Claim Bonus Add-on?

Since no claim bonus (NCB) is offered as a reward to policyholders who do not have any claim in the previous years, even a small claim can cancel the full bonus bringing it down to zero. Motor Insurance companies, however, offer customers the options of choosing a no claim bonus retention insurance add-on cover also known as NCB retention add-on. Such add-on covers offer a protection on NCB up to a certain limit allowing NCB claim even if claims have been made till a specific pre-determined limit in the previous year.

Under What Circumstances Can No Claim Bonus Be Cancelled Or Declined?

No claim bonus can be denied or forfeited in two cases. Firstly the insurance company can deny a no claim bonus in case if the policyholder has made any claim during the policy period.

The second case when there is a break of more than 90 days between insurance periods counted from the date of expiry of the old insurance. In other words, the user must renew his or her car or Two-Wheeler Insurance within 90 days of the expiry of the existing motor insurance policy.

I Am Buying A New Vehicle After Selling My Existing One. Can I Transfer My NCB?

Since the no-claim bonus is offered to the policyholder and not the vehicle, it can be transferred in the name of the current vehicle owner which they can use while purchasing insurance against any new vehicle of their choice.

What Are The Steps Involved In Transferring NCB?

For transferring NCB from one vehicle to the other, in case if the owner sells the first vehicle, he should keep a photocopy of the transfer of ownership certificate and the old registration certificate.

The next step is taking the no claim bonus certificate from the motor insurance company after forwarding a copy of the delivery note.

The third step is giving a written request to the new insurance company or for the new policy with the same insurance company to transfer the NCB in the existing policy to the new one.

NCB can be transferred even if you change the company for the new policy. The holding letter or NCB certificate is valid for up to three years and can be transferred to the new vehicle policy any time within the stipulated period.

What Happens To No-Claim Bonus If I Shift My Insurance To A Different Service Provider?

In case the policyholder changes the insurance service provider, the new insurance company allows the transfer of no-claim bonus in most cases. In case of any doubts over the eligibility of the no claim bonus certificate, the new insurance company may seek a declaration that the no-claim bonus is genuine and no claim was requested from the older insurance service provider by the policyholder.

Wised up about everything related to NCB? It’s time to get the right Car Insurance now.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
Category: Car Insurance

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14 thoughts on “Incredibly Useful Information About No-Claim Bonus In Motor Insurance

  1. ashish singh

    dear sir.
    plz rply me
    i completed one year policy of my comercial vehicle and at the renewale date i renewed the policy in short term period insurance ( 90 days). the insurance compny denied ncb. m i able for ncb in this policy or not ??? and when i will renew policy again on expiry date, that time i m able for ncb or not??

    Reply
    1. Team BankBazaar

      Hi Ashish, Most insurance policies come with a ‘No Claim Bonus’. We suggest that you go through the policy’s terms and conditions to understand if you are eligible for one or not. Cheers, Team BankBazaar

      Reply
  2. NCB query

    Is it a must to sell your old car to get NCB benefit ? I intend to buy a new vehicle but do want to sell my existing one.
    Can I still transfer my NCB?
    e.g. if you own an Alto, which carries NCB suppose 50%. You buy an new XUV, can you transfer NCB of Alto to the XUV ?
    and do i have to then buy a fresh insurance for Alto (either TP or Comprehensive) ?

    Reply
    1. Team BankBazaar

      Hi there,

      Please check with your insurance provider if you can transfer it. They should be able to advise you. This provision will vary with different insurance providers in the market.

      All the best.

      Cheers,
      Team BankBazaar

      Reply
  3. NCB query

    small correction in the 1st line – Is it a must to sell your old car to get NCB benefit ? I intend to buy a new vehicle but do “not” want to sell my existing one.

    Reply
    1. Team BankBazaar

      Hi there,

      We hope we have answered your query.

      Cheers,
      Team BankBazaar

      Reply
  4. Karun

    I have purchased a used car there is a ncb of 45% amount is 4500 on the previous policy now I want to transfer policy in my name and the previous policy is expiring in June month whether I have to deposit the amount of ncb to the insurance company or not

    Reply
    1. Team BankBazaar

      Hi Karun, You can transfer your NCB to the insurance company. Speak to the insurance company and they will help you.

      Reply
  5. Dalip

    In case of change of insurance co , can new insurance company refuse to give NCB benefit on declarations basis or this is the right of policy holder?

    Reply
    1. Team BankBazaar

      Hi Dalip,

      The NCB should be transferable in case you decide to port the policy. If you just buy a new policy, the NCB can’t be transferred.

      Cheers,
      Team BankBazaar

      Reply
    1. Team BankBazaar

      Hi ALAM,
      You can write to the insurance company informing it that you want the NCB earned on the car to be utilized for an insurance policy. Existing insurance policy details should be mentioned in the email or letter for easy reference. Once the application has been sent, it takes about one to two working days for the insurance company to issue the NCB certificate, which can be used as proof of the existing NCB. On the basis of the certificate, the insurance company can apply the NCB as a discount on the insurance premium for the car.

      On BankBazaar.com, the NCB can be declared by you when you apply for a Car Insurance policy. Click here to apply for Car Insurance.

      Cheers,
      Team BankBazaar

      Reply
  6. Jay Mehta

    The use of this bonus is only limited to car insurance and can be used to get a discount on the premium of a renewable policy. Thanks for sharing a great informative article. Keep posting.

    Reply
    1. Team BankBazaar

      Hi Jay Mehta,

      We appreciate the feedback!

      Cheers,
      Team BankBazaar

      Reply

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