New Delhi [India], Jul 27 (ANI/India PR Distribution): People today understand the importance of No Claims Bonus (NCB) feature in auto insurance. However, many people may not be aware that they can also claim NCB on a newly purchased car.
As per Indian Motor Vehicle Act, it is mandatory to have third party car insurance cover to drive a car on public roads. However, this only covers you against damage to third parties and not against damage to your own car. To cover damage to your own car in the event of an accident, you must purchase either a stand-alone damage insurance policy or a bundled all-risk policy which covers damage to your own car, yourself and to third parties.
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Premiums for comprehensive auto insurance policies are higher than those for liability insurance policies. However, you can take advantage of the Claims Free Bonus (NCB) reduction on your previously sold car to significantly reduce premiums.
No claim bonus in car insurance
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NCB is a unique feature where the insurance company rewards the policyholder for not making an insurance claim during the policy period. In other words, the PNE is the reduction applicable to the own-damage component of the automobile insurance premium for each claim-free year.
You should note here that the AON feature does not apply to motor third party liability insurance regardless of the number of claim-free years maintained by the insured.
The PNE can reach up to 50% reduction on the premium for personal damage if no claim is presented for five consecutive years. However, it goes to zero the moment you file an insurance claim.
NCB transfer when buying a new car
The NCB is the reward given to the policyholder and not to the vehicle. Therefore, you can keep your accumulated NCB after selling the old car or when changing the insurance provider when renewing the policy. Moreover, since the PNE is intended for individuals and not for the car, it can also be transferred to the legal heir within 90 days of the death of the insured.
Steps to transfer NCB from your old car to the new car
– Make sure you have the right paperwork when selling your old car
Collect the appropriate bill of sale and bill of sale when selling your old car. Submit RTO Forms 29 and 30 and retain adequate copies of the submitted form.
– Request a BCN reservation certificate
Inform your existing insurance provider that you have sold the car and request the transfer of NCB with copies of the documents mentioned above. The insurer will then issue the BCN provisioning certificate valid for three years.
– NCB transfer
Transfer your NCB by giving the NCB Reserve Certificate to your new car insurer. Few insurers, especially if it is a public company, may also require a proof of sale document and transferred RC copy with the BCN reservation certificate
Once you complete the procedure mentioned above, your PNE will be transferred to the new auto insurance plan.
Remember that even small claims on your car insurance can reduce your NCB to zero. Therefore, it is advisable to use your insurance claim with caution after a cost-benefit analysis. If you can keep your PNE for a long period of time, say five years, it can significantly lower your car insurance premium on your newly purchased vehicle.
This article is written by Ravichandran N, CTO of Kotak General Insurance, and the opinions expressed in this article are the personal opinions of the author.
This story is provided by India PR Distribution. ANI shall in no way be responsible for the content of this article. (ANI/India PR Distribution)
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