NCB is a profit that accrues to the policyholder if no claims are made throughout a coverage interval. Therefore, on the time of renewal, you get a reduction on the premium (NCB profit) which begins from 20% and will increase as much as a most of fifty% over each claim-free interval until 5 years. Nonetheless, it’s essential to know that the premium low cost might be claimed solely on the personal harm (OD) a part of the great motor insurance coverage coverage.

Whereas renewing the coverage, the NCB profit is given to the motor insurance coverage coverage proprietor and to not the insured automobile. The NCB is rarely handed on to the brand new automobile proprietor. Therefore, this turns into the rationale why the automobile proprietor can switch the NCB to his/her new automobile coverage.

You may retain the NCB earned in your outdated or present automobile’s insurance coverage coverage and get it transferred to a brand new automobile’s coverage by both promoting your outdated/present automobile or transferring it.

For example, let’s first assume that you’ve got earned 50% NCB in your 5-year-old present automobile and now, you will have offered that automobile and have purchased a brand new automobile. In such a case, whereas promoting the automobile and transferring the automobile’s insurance coverage coverage to the brand new proprietor, you’ll be able to simply retain the NCB earned in your outdated automobile’s insurance coverage coverage by making use of for an ‘NCB switch certificates’ to the earlier insurer. You additionally have to submit all related paperwork associated to the sale of the prevailing automobile, and so on., instantly after you promote the automobile to the brand new proprietor.

Now, by submitting the NCB switch certificates to the brand new insurer (assuming you took a brand new coverage from a special insurer to your new automobile), you will get the NCB transferred to the brand new automobile’s insurance coverage coverage and get an enormous low cost on the premium charges.

Nonetheless, when you’ve got not deliberate to purchase a brand new automobile instantly, you’ll be able to nonetheless declare NCB in your new automobile if bought inside three years. It’s because you’ll be able to retain your NCB for a most of three years after the issuance of the NCB switch certificates by the earlier insurer.

Secondly, there is usually a scenario the place you won’t wish to promote your 5-year-old automobile however wish to get the NCB of that outdated automobile to get transferred to the brand new automobile so as to scale back your new automobile’s premium for the reason that coverage premium charges for a brand new automobile are increased as in comparison with premium charges supplied by insurers for an older automobile. In such a scenario, you’ll have to switch your outdated automobile to another person in your loved ones. In different phrases, you could change the possession of the outdated automobile to another person inside members of the family. It’s because you can not use the NCB earned on the outdated automobile to get a reduction on the premium paid for a brand new automobile until you stay the proprietor of the outdated automobile.

Sanjiv Bajaj, Joint Chairman & MD, Bajaj Capital mentioned, “You may switch the NCB of your personal automobile automobile coverage (offered it is offered) to a brand new personal automobile automobile throughout the identical class for a similar proprietor. Nonetheless, you can not swap between the automobile courses to switch the NCB.” This implies you can not switch the NCB gathered on the two-wheeler coverage to a brand new personal automobile insurance coverage coverage.