No-claim bonus (NCB) of the old car can be transferred to the insurance of the new car. Up to 50% discount on own-damage premium for 5 claim-free years. This bonus is given to the owner, hence it is necessary to obtain NCB certificate while selling the car.
New Delhi: Are you thinking of selling your old car and buying a new one? If yes, then there is a way by which you can save big on insurance costs. You can get the ‘No-Claim Bonus’ (NCB) of your old car transferred to the insurance of your new car. Those who do not file any claims for five consecutive years can get up to 50% discount on the ‘own-damage’ premium (insurance that covers damage caused to the vehicle) on a new car.
What is this No-Claim Bonus (NCB) after all?
NCB is, in a way, a reward from insurance companies for those who drive their vehicles safely and do not make any claims. This bonus is not given to the vehicle but to the owner of the vehicle. Therefore, it is very important to keep this advantage while selling an old car. If you do not secure NCB while selling an old car, this benefit will be completely lost. Also, this discount is available only on the damage caused to the vehicle i.e. ‘own-damage’ premium and not on the legally required ‘third-party’ insurance premium.
Does the deductible increase with each year of no claims?
The percentage of discount on own-damage premium increases for every consecutive claim-free year…
- After first year: 20%
- After second year: 25%
- After 3rd year: 35%
- After fourth year: 45%
- After fifth year: 50%
In this way, you can get a maximum bonus of up to 50%. This is a big advantage for people who drive carefully.
How to transfer bonus to a new vehicle?
After selling your old vehicle, ask for ‘NCB Retention’ or ‘Transfer Certificate’ from your existing insurance company. This certificate is proof that you have not made any claim for so many years. This bonus can only be transferred between vehicles of the same type. Meaning, from one private car to another private car, or from one two-wheeler to another. This rule applies to all types of vehicles, petrol, diesel, hybrid and electric.
When you buy new car insurance, give this certificate to the insurance company. Even if you choose another insurance company for the new car, you will still be exempted from this certificate. This certificate remains valid for 3 years from the date of issue.
Insurance transfer necessary in the name of the buyer of the old car
Once you have the NCB certificate with you, also ensure that the insurance on the old vehicle is transferred to the name of the new owner. This work should be done within 14 days of selling the car.
For this, the documents of transfer of registration certificate (RC) of the car have to be submitted to the insurance company. This is very important to avoid legal hassles and continue the insurance cover.
When selling a car, the third-party insurance is automatically transferred to the name of the new owner. According to the Motor Vehicle Act, third-party insurance is mandatory for every vehicle plying on the road. Its rates are decided by the insurance regulator.
Nowadays people change vehicles very frequently. In such a situation, you can save a good amount of money on ‘own-damage’ premium by transferring the no-claim bonus to a new car while selling the car.