People at large are aware of the need to have an insurance policy when buying a car. The legal requirement laid down by the Motor Vehicles Act of 1988 has made it essential to have one. But apart from this legality, there are quite a few benefits of a car insurance policy. Protection of damages to the vehicle, coverage for third-party liabilities, personal accident coverage are some of the them. One can buy car insurance online making it easier for them to compare the right policy features.
An essential feature that often gets overlooked is the no-claim bonus. No-claim bonus or as popularly referred as NCB is a form of reward offered by insurance companies to its customers. The NCB benefit is in the form of concession at the time of car insurance renewal thereby further lowering the premium. It isn’t always a claim is made for repairs or damages to the car. At these times, an entire policy tenure goes by without any claims. Since no claims by the policyholder benefits the insurance companies, they provide a renewal benefit in return which is known as the no-claim bonus.
What are the benefits of no-claim bonus?
#1 Rewards: The most noteworthy benefit of the no-claim bonus is the reward offered by the insurance company for not making any claims during the previous policy year.
#2 Lower premium at time of renewal: Savings are another highlight of the no-claim benefits. The car insurance companies offer a concession at renewal of the insurance policy which result in savings in premium costs.
#3 Linked to the policyholder and not the vehicle: The no-claim benefits are linked to the policyholder and not the vehicle. Thus, these benefits are extended to all cars replaced by the policyholder. There is no limit on the number of cars that can be changed, and the benefits can be transferred seamlessly.
#4 Transferability: Since the no-claim benefits are linked to the policyholder, it is easily transferable. All that needs to be done is obtain a NCB certificate from the former insurance company and submitted to the new insurer.
What are the points to remember when transferring the NCB benefits?
As discussed above, no-claim benefits under an insurance plan are transferable. There are a few formalities that need to be completed to get the NCB benefits in the new insurance policy. It depends on whether the conventional approach of offline transfer or the modern-online way is chosen. For offline transfers, the sale agreement for the car along with RTO Form 29 and 30 are required to be accompanied to the letter requesting transfer of the NCB. An NCB certificate will then be issued by the insurer which needs to be submitted to the new insurer. For online process, it is much simpler wherein details about the previous insurance policy are required. Policy number, the percentage of accrued NCB are the detailed based on which the new insurance company will then take forward the process. These details can changes as per IRDAI norms.
Here are some of the documents that shall be needed for NCB transfer –
- Application for transfer of no-claim benefits
- RTO Forms 29 and 30
- Copy of the existing insurance policy
- Details about the new car purchased (Booking form)
Take a note of the above-mentioned benefits of the no-claim bonus and its transfer use it smartly in car insurance transfer process. It can help you avail continued coverage from the insurance company as well as lower the insurance premiums. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.