What Is an NCB Certificate in Car Insurance? A Complete Beginner’s Guide

What is No Claim Bonus in Car Insurance?

No claim bonus or NCB is a special type of discount that insurers offer to policyholders. It is a type of reward for safe driving and not making any car insurance claims within the policy term. You can earn up to 50% NCB with five consecutive claim-free years and use it to lower the premium of the own damage component of the car insurance.

Here’s a chart of how NCB is awarded with each claim-free year:

• After your 1st claim-free year: You qualify for a 20% discount on your renewal.
• After 2 successive claim-free years: Your discount jumps to 25%.
• After 3 successive claim-free years: You earn a significant boost to a 35% discount.
• After 4 successive claim-free years: Your savings climb to 45%.
• After 5 successive claim-free years: You reach the maximum cap of a 50% discount.

What is a No Claim Bonus Certificate in Car Insurance?

The No Claim Bonus Certificate is a document that the provider of your car insurance issues. It verifies that you haven’t raised any insurance claims during the previous policy term and lists the percentage of NCB currently applied, which can range from 20% to 50%. It also contains details like the policy number, car make and model, engine and chassis numbers, and the validity of the no claim bonus certificate.

You should note that no claim bonus is awarded to the policyholder, not the vehicle. So it is tied to the policyholder, who can transfer it to another policy when switching insurers. NCB can also be transferred to a new car’s policy from the old one if the policyholder decides to replace their old car with a new one. For both these processes, having a valid certificate of no claim bonus is crucial.

How to Obtain a No Claim Bonus Certificate?

The no claim bonus certificate is issued by the provider of your car insurance. Although the steps may vary from insurer to insurer, here is a general outline of how to obtain an NCB certificate for for-wheeler insurance:

• Step 1: Get in touch with your car insurance provider and inform them about your intention to cancel or switch policies.
• Step 2: Submit all the necessary details as requested by the insurer, including vehicle details, policy number, your name, address and phone number.
• Step 3: After submission of the details, the insurer will check your claim history to find out whether you qualify for an NCB certificate.
• Step 4: If qualified, you can raise an official request for the No Claim Bonus Certificate and provide the additional documents needed.
• Step 5: The insurer then processes your request and issues the No Claim Bonus Certificate or NCB Certificate.

You can then complete the NCB certificate download and get a printout. Once you get the NCB certificate, you can submit it when purchasing insurance for a new car or migrating to a different insurer. After this, you can receive the applicable discounts on the Own Damage (OD) premium of the car insurance policy.

Steps to Transfer No Claim Bonus in Car Insurance

When you sell your vehicle, you have the ability to transfer the insurance to the new owner. However, you can’t transfer the NCB as it is awarded to the policyholder and not the vehicle, so it stays with you.

When renewing your policy with a different insurer online, you need to provide accurate details of your previous policy, including the past policy expiry date, the correct percentage of applicable NCB and the name of the insurer. The new insurer will verify the details and transfer your accumulated NCB benefits to the new policy.

For the offline transfer of no claim bonus in car insurance, you will need to obtain the NCB certificate and provide it to the new insurer with other documents during the buying process. Enjoy transparent pricing and a seamless car insurance buying/renewing experience at Jio Insurance Broking.

The documents required for an NCB transfer are listed as follows:

• Letter of sale: You need to provide a copy of the sale agreement and attested copies of Form 29 and Form 30.
• Declaration letter: You need a declaration letter issued by the previous provider of your car insurance.
• Previous policy details: You need the details of the car insurance policy issued by the previous insurer.

Important Tips & Considerations About NCB in Car Insurance

Now that you know what no claim bonus is and how to get NCB certificate, it is vital that you learn about the following tips and facts related to it:

Policy lapse

Besides claim-free years, you also need to renew your policy on time to retain the earned NCB benefits. If you fail to renew your policy even within the grace period, which is typically 90 days from the expiry date, your NCB resets to zero.

Right policy type

Note that NCB discounts are only applicable to the OD component of the car insurance. Hence, you can’t earn NCB with a third-party-only car insurance policy or use it for discounts on third-party car insurance premiums. You can earn NCB with standalone OD or comprehensive car insurance plans.

Accurate NCB declaration

When buying or renewing a car insurance policy, you must state the correct percentage of No Claim Bonus that you have earned so far. If you select an incorrect NCB, you may face problems with your future car insurance claims.

No Claim Bonus Protector Add-On

NCB is awarded for completing claim-free years. So, if you raise a claim within the policy term, you do not earn this benefit and your accumulated NCB resets to zero. To avoid this, you can invest in an NCB protector add-on. With this, you can raise a specified number of claims within the policy year without losing your accumulated NCB.

Conclusion

Maintaining No Claim Bonus or NCB is the most efficient way to ensure savings on car insurance premiums. With an NCB Certificate from the insurer, you can have documented proof of your earned NCB. You can utilise it for a seamless transfer of NCB when purchasing insurance for a new car or migrating to a different insurer.

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