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CAR INSURANCE

How to Claim NCB on New Car?

Karan Sharma Karan Sharma 23 March 2020

Learn how to use No Claim Bonus (NCB) while purchasing insurance for a new car.

Car Insurance

What is NCB in Car Insurance?

In simple terms, No Claim Bonus (NCB) is a discount given by an insurance provider for making zero claims during a particular policy year. It can also be accumulated over consistent years to get a discount on premiums. In addition, an NCB can be used even when an individual owner changes its vehicle, as it is transferable to a new vehicle bought by the policyholder.

How does NCB Work?

The NCB works by providing a discount on the premium payable on the renewal of the policy where no claims are made. Therefore, NCB helps in reducing annual car insurance premium. For example, if a policy provides an NCB of 20% for first claim free year, you can avail a 20% discount on premium during the time of renewal for the second year.

If you are looking to utilise the NCB while purchasing insurance for a new car, here’s how to go about it.

  • Selling the Old Car: This is the most important step. The existing car which has accumulated NCB can be sold to the dealer or a third party and the accumulated NCB can be transferred to the new car. Ensure that you receive the sale invoice and sale deed.

  • NCB Certificate: As a policyholder, you need to communicate to the insurance company that you have sold your old car. Post communication, you can make a request that the NCB earned on the old car is to be utilised for the new car. Ensure that you submit all the policy and vehicle details.

  • Documents: The following documents are required along with the written application: 1. Copy of delivery note received for the sale of old car, 2. Copy of the booking form for the new car, 3. Copy of insurance policy for the old car.

Once the NCB application has been sent to the insurer, it will take 2-3 working days for the insurance company to issue an NCB certificate. It is on the basis of this certificate, the insurance company can apply the NCB as a discount on the insurance premium for the new car.

Conclusion

Now that you know how to use No Claim Bonus while purchasing insurance for a new car, here are a few more points to remember.

  1. NCB can be transferred from one car to another as long as the policyholder is the same.

  2. NCB is transferable from one insurance to another at the time of renewal.

  3. An NCB certificate is mandatory for facilitating the transfer of NCB.

  4. NCB lapses if a claim is made during the policy year.

  5. NCB lapses if the policy is not renewed within 90 days from the date of expiry of the existing policy.

Karan Sharma
Written by Karan Sharma
Content Specialist and Strategist, foolishly creative and always ready for a game of 'Call of Duty'.