How to use no claim bonus while buying insurance for new car
No claim bonus (NCB) is accrued to a motor insurance policy if no claims are made during the policy period. The bonus works as a discount on the premium payable on the renewal of the policy. It is also possible to use the NCB while buying insurance for a new car. Here’s how to go about it.
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Selling the old car
The existing car, which is eligible for NCB, must be sold either to the dealer or a third party for the NCB to be transferred to the new car. It is important  ..
Applying for the NCB certificate
The policyholder can then write to the insurance company informing it about the sale of the old car and that he wants the NCB earned on the old car to be utilised for the new car. Existing insurance policy details should be mentioned in the email or letter for easy reference.


Documents needed
The following documents are required along with the written application:
1. Copy of delivery note received for sale of old car.
2. A copy of booking form for the new car.
3. A copy of insurance policy for the old car.
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Use of the NCB certificate
Once the application has been sent, it takes about one to two working days for the insurance company to issue the NCB certificate, which can be used as proof of the existing NCB. On the basis of the certificate, the insurance company can apply the NCB as a discount on the insurance premium for the new car. A substantial discount can be availed of if the existing NCB is 50%.
Points to note
1. To transfer the NCB to a new car, the insurance for it doesn’t have to be taken from the same insurer.
2. The NCB of an old car can make a big difference to the insurance premium of the new car.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

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