No Claim Bonus - How to save on your insurance premiums!

NCB is the short form of No Claim Bonus; it is rewarded to the owner of the vehicle who is also the policy holder for No Claim / Claims reported in the previous policy year. It can be accumulated over a period of time.

Do you know you can save as much as 50% on your new car’s insurance? You can transfer a No Claim Bonus (NCB) from your old car. One can transfer the NCB from your old car to reduce the cost of insurance for your New car.

NCB rewards you for being a good driver and helps you save on your motor insurance.

Most Indian car buyers negotiate on financing, dealer discounts and freebies but forget about the insurance component.

How to use the NCB to save on your insurance premium

• When you sell your old car: The biggest mistake people make is transferring the insurance lock stock and barrel when selling a car. Ensure that ownership is transferred and make a photocopy of the new entry in the RC book for insurance purposes.


• Obtain the NCB certificate: Forward a copy of the delivery note to your insurance company and ask for the NCB certificate or holding letter. This letter is valid for three years; you may find it easiest to go to your insurer's local office to pick it up in person.


• Use the NCB: Forward the NCB letter to your new car's dealer. Voila! You have just transferred the NCB to your new car insurance and saved a bundle.

Remember to shop around; manufacturers’ insurance schemes are much cheaper than regular insurers’.

Another process, if you are happy with your existing insurance company, is to go to the insurer with your new car invoice and chassis number. The agent should use your NCB to offer a reduced premium and give you a cover note on the spot. The dealership will need this cover note to register your car with traffic authorities.

Insurance Tip: If you are buying a premium car, it would be wise to opt for Zero Depreciation  Add-on car insurance policy. After all, premium cars are equipped with premium-priced parts.

Some Points to remember:

• A No Claim Bonus means just that – no damage claims on your car. Drive carefully, take security measures to protect your car and claim judiciously.
• NCB follows the fortune of the customer and not the vehicle
• NCB can be transferred to the new vehicle in case of substitution of vehicle of the same class
• Validity - 90 days from the date of expiry of the policy
• NCB can be utilized within 3 years (where the existing vehicle is sold and a new vehicle is purchased)
• NCB recovery can be done in case of a name transfer
• It sometimes makes sense not to make small claims. Ideally, whenever your vehicle is damaged, get an estimate for the repairs. If the No Claim Bonus you stand to exceeds the estimate, it makes sense not to raise a claim and instead pay for the damage yourself.
• You can transfer full benefits of No Claim Bonus when you shift your policy from another company to another insurance company.

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