How to Move Your NCB to a New Insurer

Posted on: Nov 11, 2024 | 3 mins | Written by: HDFC ERGO Team

How to Move Your NCB to a New Insurer

If you've ever purchased a new car insurance policy, you're likely familiar with the term No Claim Bonus (NCB). NCB in car insurance is a reward provided by insurance companies for not making any claims during the policy period. This bonus can result in substantial discounts on your premiums, providing a real incentive to drive safely and avoid making unnecessary claims.

But what happens to your accumulated NCB when you decide to switch to a new insurer? This guide will explain how to move your NCB to a new insurer, ensuring you don't lose out on this valuable benefit.

Understanding NCB in Car Insurance

The NCB is a discount offered on premiums by insurance companies to policyholders who have not made any claims during their insurance term. This bonus typically starts at 20% and can go up to 50% over successive claim-free years. Essentially, it’s a reward for driving carefully and responsibly.

The key advantage of NCB in car insurance is that it can significantly lower the premium amount for your policy renewal. For every consecutive claim-free year, the percentage discount on your premium increases, allowing you to save more money over time. This makes it one of the most sought-after benefits of a comprehensive insurance plan.

Can You Transfer Your NCB to a New Car Insurance?

Yes, you can transfer your NCB to a new car insurance policy. The good news is that the NCB is tied to you as a policyholder and not the vehicle. This means if you decide to buy a new car or change your insurer, you can retain the NCB you've earned over the years. However, the process involves some essential steps and paperwork, which must be completed to successfully transfer your NCB to the new insurance policy.

How to Transfer NCB to a New Insurer

Transferring your no claim bonus to a new insurer is relatively straightforward. Here’s how you can do it:

1. Obtain an NCB Certificate:

First, you need to request a letter from your existing insurer stating the NCB you've earned. This certificate confirms that you have a certain percentage of NCB, which can be used for your new car insurance policy.

2. Submit the Necessary Forms:

You will need to fill out and submit Forms 29 and 30. These forms are used to notify the insurer of the transfer of ownership of your car and to apply for the transfer of your NCB to your new car.

3. Receive the NCB Certificate:

After reviewing your documents, your current insurer will issue an NCB certificate valid for three years. Make sure to keep this certificate safe, as it will be needed when you purchase a new insurance policy.

4. Provide the Certificate to Your New Insurer:

When you decide to switch insurers, submit the NCB certificate to your new insurer. This will allow the insurer to adjust your new policy's premium according to the NCB you’ve earned.

Key Points to Remember When Transferring Your NCB

When transferring your no claim bonus, there are a few important points to keep in mind. These are:

• Complete a Full Policy Term:

You are eligible for an NCB only after completing a full 12-month policy term without making any claims.

• Validity of NCB Certificate:

The NCB certificate is valid for three years from the date of issuance. If you do not use the NCB within this period, it will expire, and you will no longer be eligible for a discount.

• Timely Application for NCB Certificate:

Apply for the NCB certificate within 90 days of selling your car. Failure to do so may result in the loss of your accumulated NCB.

Rules Governing the Transfer of NCB

According to the Insurance Regulatory Development Authority of India (IRDAI), the NCB belongs to the insured person and not the vehicle. Therefore, if you sell your car and purchase a new one, you can transfer the NCB to your new car. Here are the rules to keep in mind:

• The NCB Is Personal:

When you sell your car, the NCB does not get transferred to the new owner. Instead, the NCB remains with you, the original owner.

• Paperwork for Transfer:

You must submit the buyer-seller agreement along with Forms 29 and 30 and a letter requesting the transfer of the NCB to the new insurer.

• Present Certificate:

When purchasing a new car insurance policy online, present the NCB certificate to the new insurer. Ensure that you provide accurate information to avoid any complications.

How to Maximise the Benefits of Your NCB

The NCB can be a significant cost-saver if utilised correctly. Here are some tips to get the most out of it:

1. Negotiate with Dealers:

When purchasing a new car, negotiate with the dealer not just on the vehicle price and financing terms but also on the insurance policy. Ensure that your NCB is considered when calculating the premium.

2. Maintain Proper Documentation:

Always keep a copy of the new entry in the Registration Certificate (RC) book for vehicle insurance purposes. Send this to the insurer to receive the NCB certificate, which remains valid for three years.

3. Compare Online Insurance Options:

Check various vehicle insurance options online to get the best deals and save money. Make sure to provide accurate details about your NCB to avoid complications later.

4. Avoid Frequent Insurer Changes:

Refrain from switching insurers frequently. Changing insurers before the end of the policy term may result in the loss of your NCB for that year.

5. Verify No Claims Proof:

At the end of the policy term, ask your current insurer for proof of no claims. The new insurer will require this document to apply the NCB discount.

NCB for Company Cars

If you have accumulated an NCB on a company car, you can still transfer it when purchasing a new car, provided your name is listed as the insured on the company car's insurance policy. To transfer the NCB from a company car to a personal vehicle, confirmation from the employer is typically required.

Conclusion

Transferring your NCB to a new insurer is straightforward and can significantly reduce your car insurance premium.

Remember to complete the necessary paperwork, keep track of important deadlines, and always verify your NCB status with your insurer. By doing so, you can enjoy the benefits of your no claim bonus for years to come, whether you stick with your current insurer or switch to a new one.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

How to Claim NCB on New Car Insurance Policy Premium?

How to Get NCB Certificate?

Importance of No Claim Bonus for Car Insurance

Benefits of No Claim Bonus in Car Insurance

Tips & Tricks to Keep Your NCB Bonus Intact