No Claim Bonus or NCB is a discount in premium offered by insurance companies if a vehicle owner has not made a single claim during the term of the vehicle insurance policy.
The NCB is a reward to the vehicle owner for prudent use of the vehicle. For example, if you sell a 10-year old hatchback and purchase a C-segment car, the no-claim bonus will pass on to the new vehicle and you can save considerably on your insurance costs. It can be transferred to another insurance company subject to evidence in the form of a renewal notice or letter, confirming the NCB entitlement from the previous insurer.
This discount in the premium is usually 20% for the second year, 25% for the third year, 35% for the fourth year, 45% for the fifth year and 50% for the sixth year. The value of the discount depends upon the insurance claims you have made in that particular year. NCB can be carried forward and will be only allowed provided the policy is renewed within 90 days of the expiry date of the previous policy.
Below are the points to use the NCB and to save insurance premium:
- When selling a car, always transfer the insurance lock stock and barrel. Make a photocopy of the new entry in the registration certificate book for insurance purposes.
- Forward a copy of the delivery note to your insurance company and ask for the NCB certificate or holding letter which is valid for three years.
- Forward the NCB letter to your new car’s dealer. Transferred the NCB to your new car insurance and saved money.
- The agent at the insurance company should use your NCB to offer a reduced premium and give you a cover note on the spot. The dealership will need this cover note to register your car with traffic authorities.
- If you are buying a premium car, it would be good to opt for zero depreciation car insurance.