Have an Expired Car Insurance Policy? Know How You Can Transfer Its NCB

    In the beginning of the 21st century, cars were a sign of wealth and luxury. But as decade have passed, it is no longer a status symbol and indulgence, instead, it has become a necessity for safe and comfortable commute. With towns and cities having good road connectivity, workplaces have moved far away from home and people commute over such distances each day.

    Since cars are essential for an easy travel, it is best to protect it using an insurance plan. While you can buy car insurance online as the bare minimum to ensure legal compliance, such policy offers a limited coverage. Hence, it is known as a limited liability cover. Contrary to such limited liability plans, you can purchase comprehensive policies that offer a broader coverage protecting your car against damages alongside the mandatory third-party coverage. Comprehensive policies, however, have one lesser-known benefit that helps keeps the premium in check—No-Claim Bonus or NCB.

    What is the no-claim bonus?

    No-claim bonus or NCB is a reduction in premium offered by the insurer at the time of car insurance renewal. Such NCB benefits are available only when no claims are made during the previous policy period. To simply state, it is a benefit that the insurance company passes because you do not make any claims during the previous policy tenure. Such NCB benefits can be accumulated over the years to further lower the car insurance prices.

    When can you transfer the no-claim bonus?

    Your car insurance policy’s no-claim bonus can be transferred in two scenarios—one, when your policy is expired and due for renewal and you want to switch your insurance company and second, when you sell your car to transfer it to a new car’s insurance cover. In both these scenarios, you need to obtain an NCB transfer certificate which remains valid for a period of three years from its date of issue. You can visit the official website of IRDAI for further details.

    What is the process of transferring the NCB?

    Your car insurance policy’s accumulated NCB can either be transferred during the policy period or at the end of its tenure. With an NCB retention letter shared with the new insurance company, your accrued and accumulated NCB can be transferred.

    Here are the documents that are required to issue an NCB retention letter:

    • Request letter for policy cancellation in case of transfer during the tenure.
    • Original copy of the existing car insurance policy
    • Form 29 of the RTO that mentions the notice of transfer of vehicle’s ownership
    • Form 30 of the RTO which is an application for transfer of the ownership.
    • Amended registration certificate with name of new owners.
    • Copy of delivery note.

    Apart from the above pointers for transferring the NCB, here are some addition considerations to keep in mind:

    • The no-claim bonus is linked to the policyholder and not the vehicle. Hence, even if you sell your car, the NCB still belongs to you.
    • Make sure to submit the NCB retention letter within its validity of three years to the new insurance company otherwise all accrued benefits will be lost.
    • Such NCB transfer is possible only among the same category of vehicle, i.e., your car’s NCB can be transferred to another car and not a bike and vice versa.

    You can visit the official website of IRDAI for further details.

    With these pointers discussed on how you can transfer no-claim bonus in your car insurance plan after its expiry, make sure to use a car insurance calculator to know its impact on the premium. 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.