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Learn More About No Claim Bonus On A Expired Car Insurance And Whether It Can Be Transferred

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NCB or No Claim Bonus is a reward in the form of a discount offered by the insurance providers to the insurance holders or the owner of the car. This is awarded as a safety reward when the owner of the vehicle does not make a single claim during the term of the vehicle insurance policy in a given year.

Here are certain things that you need to know about the No Claim Rewards:

  1. Discount Available Only on Renewal: The discount of the No Claim Bonus can be available only when the policy is renewed. The NCB cannot be claimed by the insurance holders as a right. It has to be earned by them by maintaining a claim free record with the insurance providers. The discount percentage of the No Claim Reward ranges from 20% to 50%. When the owner of a vehicle first purchases insurance, he or she is not liable for any discount from the insurance provider. It is earned by them if at the expiry of the insurance if there is no claim made by the insurance policyholder. With every claim free year, the discount percentage of the No Claim Bonus increases.
  2. No Claim Bonus Protection: There can arise a situation where in the event of a small incident or accident the insurance holder has to forego a small amount of the No Claim Bonus. To avoid this, the insurance holders can avail the add-on cover facility that is provided by the insurance companies. This cover provides assurance on the No Claim Bonus up to a certain level. However, this assurance is not provided by all insurance companies. Therefore, as a car owner, you must conduct thorough research and choose the plans that come with the extra facility.
  3. Add –on Covers: Even though it is easy to make a claim from the insurance providers every time the vehicle suffers any minor damages; it is suggested to carry out a cost benefit analysis before doing so. This is precisely because the No Claim Bonus turns to zero even if a small claim is made. Hence, the insurance holders can actually end up saving more on the end of the year while renewing the insurance from the discounts earned from No Claim Bonus by forgoing the small claims.
  4. Termination: There are two instances where the No Claim Bonus can get terminated. One is when the insurance holder makes any claims, however small, during the tenure of the policy year. The other is when the insurance holder fails to renew the insurance policy within 90 days of the expiration of the previous policy. 
  5. NCB Belongs to the Insurance Holder: One of the most important features of No Claim Bonus is that it is associated with the insurance holder and not the vehicle on which the insurance is claimed. Hence, if the insurance holder thinks of selling the old car for a new one, they can retain the No Claim Bonus. It can also be retained if the insurance holder plans on changing the insurer at the time of renewal. However, the No Claim Bonus cannot be transferred from one person to another. The only exception where this can happen is when the insurance holder passes away. In this case, the NCB will be transferred to his or her legal heir.
  6. Transferring the NCB: There is a simple procedure that the insurance holder needs to follow to transfer their NCB in case they are selling their old car and buying a new one. The insurance holder needs to request their current insurance provider to transfer the insurance by submitting two Forms - Form 29 and Form 30. The current insurer will then provide them with an NCB certificate which they need to show to the insurer they are transferring to. In cases when the insurance holder is switching to the new insurer at the time of renewal of the policy, then it is a possibility that the NCB certificate will not be needed.
  7. Third Party Cover:  The No Claim Bonus is not available on third party insurance of the vehicles. Therefore, the insurance holders who have third party insurance will not be eligible for No Claim Bonuses irrespective of if any claims have been made or not and the number of years the insurance policy have been renewed. Therefore, to note, the No Claim Bonus is available to own damage premium component.
  8. Bonus Proof: The No claim Bonus proof is valid for only a period of two years. Hence, the insurance holders who don’t have a valid policy for two years will have to start the process from the beginning in case she wants to take a new policy.

The No Claim Bonus can be a real saviour if you do need to file a claim. So, ensure that you read your policy document carefully and make sure you get all the NBC related benefits.

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