17th October 2020
Buying a car is a very pleasing and exciting experience that everyone wishes to cherish for their whole life. The feeling of driving in your own car at ease has an appeal of its own, but if you wish to sit in that car with the same ease as you did when you first got the car, you should definitely get a No Claim Bonus along with your car insurance.
No Claim Bonus can be understood as an added security. It is no secret that car prices usually tend to rise on a regular basis, here, with an NCB you get to enjoy an exciting proposition with your luxury car insurance whereby every year premiums go down.
If you are not very educated on the topic of NCB, Here’s a list of things to help you know better:
No Claim bonus, is a reward from the insurer to the policy holder in a motor insurance for not making a claim in the previous years. NCB is a discount on premium payables that ranges which can be earned by maintaining a claim-free record but cannot be claimed as a right. One is not eligible for any NCB discount on the premium paid when you buy your first comprehensive motor insurance policy. This is because you do not own a claim-free record for any consideration in the first place.
On the first renewal of policy a starting claim of 20% can be made on the NCB, but this claim is available only if there have been no claims in the past year. With every year that passes claim free, this discount increases steadily upto a maximum of 50%, after passing claim free five years.
This feature is one of the most important characteristics of the No Clause Bonus. This feature basically means that the NCB is associated with the policyholder rather than the vehicle. This allows you to retain your NCB even if you replace your motor vehicle with a new one or decide to shift to a new insurer at the time of renewal of the policy.
A person to person transfer of No Claim Bonus is not allowed, except in case that person is the legal heir of the policyholder. This exception comes into play only on the death of the policyholder and not otherwise.
Since these days the second-hand car market is hot with exclusive deals, AutoBest gives you the best offers on pre owned luxury cars or second-hand premium cars with an option to renew your policy too. This way you don’t have to run errands and get your NCB on your new car as well!
When you are planning to sell your old car and buy a new one in its place, the transfer process of a No Claim Bonus is a very simple process. This process can be understood with the following steps:
Step-1: Fill out Form 29 and 30, the buyer agreement form, and submit it to your existing insurer, with the letter requesting transfer of NCB attached to it.
Step-2: Now a certificate of NCB has to be issued by the insurer. This certificate has validity for three years.
Step-3: Now the certificate of No Claim Bonus issued at ‘step-2’ has to be submitted to the new insurer.
If at the time of policy renewal of your existing car you are planning to switch to a new insurer, in that case, you don’t need to go through the hassle stated above and simply just need either your renewal notice that clearly mentions the No Claim Bonus you are eligible for, your last year’s policy document.
In case you are planning to buy your policy online, it is very likely that there’s a chance that submission of the certificate will not be necessary. Here, your NCB will be transferred based solely on your declaration. However, this does not refrain you from making any claims that you made earlier. Here, your insurer now has the full right to verify such information from your previous insurer.
If you are stuck in a dilemma not knowing what to choose between claims and NCB, with your base insurance policy, choosing an NCB brings a protective add-on cover that safeguards your NCB. This added protection works even if there’s a claim, subject to some restrictions.
In case of a third party insurance for cars, NCB is not available. This discount available under NCB is not applicable to the third party liable premium that constitutes 15-20% of the total premium, but applicable only to own damage premiums. This means, if you own a third party car insurance, no matter the number of years of the policy or if any claim has been made in between these years, NCB is not earned.
The “Sunset Clause” on an NCB is the basic capping limit. It says that the maximum NCB that a policyholder is entitled to is 50% only, and once this limit is reached the discount cannot increase even if no claim is made in the future years.