Did you know that No-Claim Bonus can be transferred from One Car to Another?


4 min read

Updated on Sep 23, 2022

While costs, in general, tend to climb, car insurance provides a distinctive opportunity in that premiums can potentially decrease year after year owing to the NCB.

NCB (No-Claim Bonus) is a term used in the insurance industry to refer to the reduction in annual car insurance premiums due to no claims made during the relevant policy year. This means that if you do not file any claims within the policy period, your renewal rates will be lower than they otherwise would have been. It is a system that all insurance companies adhere to.

Smart policyholders are aware of this no-claims discount and understand its importance in netting savings in future years when they renew their car insurance policy. However, there are several features of NCB in car insurance that new policyholders may be unfamiliar with, one of which is the transfer of the No-Claim Bonus from one car to another. This blog will be a guide on this process.

No-Claim Bonus Rules

According to the IRDA (Insurance Regulatory and Development Authority), the No-Claim Bonus belongs to the individual policyholder, not the car. This implies that when a car is passed on to another individual, just the insurance coverage may be transferred. The No-Claim Bonus in the current policy stays with the original policyholder.

How to transfer NCB from one car to another?

Generally, you may transfer your existing NCB to another vehicle. However, if you change insurance provider before the end of the year, you will not be eligible for the No-Claim Bonus for that particular year.

If you are looking to transfer your NCB to another car without changing providers, you can contact your insurance company or agent and ask for the details of the process. Some companies may include your confirmation of no raised claims in the renewal statement for your motor insurance. You can provide the same during the transfer as proof of zero-raised claims. The only requirement is that you need to be the policyholder of both the insured car at the point of NCB transfer.

How to transfer NCB with a New Insurance Provider?

If you have been using the same insurance company for a long time, you can still buy from a new provider and get NCB. However, verification from your insurer will be required.

Here is a step by step breakdown of the procedure:

  1. Visit your previous insurance company.
  2. Initiate a No-Claim Bonus transfer and provide all relevant documentation.
  3. The No-Claim Bonus certificate will be issued by your former insurance provider.
  4. Send the No-Claim Bonus certificate to your new insurance provider.
  5. The No-Claim Bonus will be transferred to your new insurance provider.

Required Documents include:

  1. Application for Transfer
  2. Car insurance Photocopies
  3. Buyer-Seller Contract i.e Form 29 and Form 30
  4. Photocopies of the previous registration certificate or the ownership transfer certificate
  5. Delivery Note Photocopies
  6. Booking receipt Photocopies
  7. NCB Certificate

To relocate the NCB from the current insuring firm, the primary car owner must file Forms 29 and 30 – together with a statement explaining the application. The insurance company would be required to provide an NCB certificate that is effective for three years. This document must be shown to the new insurance firm that will be covering your car. When purchasing auto insurance digitally, the certificate is not necessary; instead, a statement from the policyholder is sufficient.

Under no circumstances should the policyholder conceal any information, such as raised claims- the new insurance provider will undoubtedly verify the information provided by the prior insurance company.

NCB transfer of Company Vehicle

The No-Claim Bonus on a corporate automobile is only transferrable to another vehicle if the employee is specified as the policyholder on the employer’s insurance plan. The benefit of business auto insurance coverage is that if NCB accumulates, the insurer merely requires verification from the company to transfer the No-Claim Bonus.

Please Note

Even if you possess absolutely no bad intentions and put any amount for NCB when transferring insurance coverage, the repercussions might be severe. If you declare your NCB incorrectly, your insurance company may dismiss your auto insurance claim entirely. That implies that if you state the incorrect NCB while applying for insurance, you’ll get the same coverage as if you didn’t apply at all.

Whether you are transferring auto insurance policies, make sure you mention if you have filed any claim with your former insurer in the preceding year. Insurance firms can readily obtain this information, and although you may receive the coverage, there will be a difficulty when it comes time to file claims; therefore there is no purpose in concealing or providing wrong data.

If you are looking to save on your car insurance then, NCB can be of great help. The No-Claim Bonus that you have earned can be transferred to the insurer of your new car which you are about to buy. This is absolutely legitimate and it saves you money, too. So, if you just changed your car, then there is no reason why you should not try this option.

Also Read: What is the Difference Between 1st Party and 3rd Party Insurance?

Jan 10, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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