Hyderabad: Insurance companies reward vehicle owners with 'no claim bonus' (NCB) for ensuring safe and accident-free driving. The reward is for the owner and it is transferable. Many people forget to transfer this NCB when they replace their old vehicle and buy a new one. So, they end up paying higher premiums when taking insurance for a new car. In this context, there is a need to know how to use the NCB.
A vehicle must have insurance, at least third party, to move on the road. This policy should be renewed annually on time. If there is no claim during a particular year, insurance companies will give discount in premium. This discount is known as no claim bonus. It depends on some parameters. This applies up to 20 percent if there is no claim in the first year.
If there are no claims in the second, third, fourth and fifth years, NCB will be available up to 25%, 35%, 45% and 50% respectively. It has been limited to a maximum of 50 percent. The no claim bonus (NCB) is useful to reduce the premium burden at the time of renewal of motor insurance policy. The NCB is applicable only for own damage (OD) premium policies.
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You will have higher NCB if claims are not made for small losses. For example, you are entitled to Rs 5,000 NCB at the time of policy renewal. Now a minor repair costs Rs 2,000. Then it is better to pay from your hand. If you make a claim, you will lose no claim bonus which is higher. All such calculations should be made before deciding to make an insurance claim or not.
The NCB transfer can be done very easily. When taking an offline policy from an insurance company, contact the company directly and submit the necessary documents for NCB transfer. The insurance company will provide your NCB certificate. The certificate should be provided to the new insurer. Then you will be transferred NCB. If buying online, the old policy number for NCB and name of the insurer should be given to new company. The new insurer will transfer the NCB to you. This NCB certificate is valid for three years.
This NCB cannot be transferred to a new vehicle as long as you are the owner of the old car. This is only possible when the old car is sold or transferred in the name of another family member. The NCB will be cancelled if the motor insurance policy is not renewed within 90 days of expiry. Now insurance companies are offering protection of NCB as a supplementary policy as well. These can be examined.
