Can You Transfer the No-Claim Benefits of Old Car to Your New Policy?

You might have heard numerous times that driving a car legally requires a motor insurance policy. A motor insurance policy takes care of unfortunate events that cause damage to you and your vehicle. But you do not always meet with an accident and must make a claim. Accidents are rare; at other times, you can reduce your insurance premium by availing of no-claim benefits. A no-claim bonus is a facility where the insurance company offers a concession in the own-damage premium at the time of car insurance renewal. These benefits can be availed if you have not made any claim for the previous policy tenure.

As newer models of cars are launched each month, you might consider upgrading too. So, can you take advantage of your accrued no-claim bonus on your new car? The simple answer is ‘yes.’ A policy’s no-claim benefits are linked to you, the policyholder, and not the vehicle. NCB benefits can be transferred to your new car. NCB benefits can be transferred to your new car.

Old Car to Your New Policy

What are the situations when you can transfer the no-claim bonus?

There are two situations where you can primarily transfer the no-claim benefits of your car insurance policy. They are as follows –

  1. Suppose you have accumulated a no-claim bonus on your old car insurance policy, which can be transferred to your new policy on selling your old car. The NCB benefits can be retained from your old car in this situation. These same benefits can then be availed when you buy a new vehicle. For that, you shall be required to obtain an NCB transfer certificate, which can be used to obtain a concession on the damage premium of your new car.
  2. Suppose you have accumulated NCB on your old car but want to transfer it to your new vehicle while retaining the old car. This is a case where you own both vehicles but want to share the NCB. Since these benefits are linked to the policyholder, only one of the cars can avail of these benefits. Thus, it can only be done when the old car is sold or transferred.

What are the documents required to receive an NCB retention letter?

The no-claim benefits are only available for comprehensive car insurance policies. So, if you purchase third-party car insurance online, no NCB benefits will accumulate, which can then be transferred. As discussed, the NCB benefits can only be transmitted when your existing vehicle is transferred. Post-transfer, the insurance company will issue an NCB retention letter. These are the documents that shall be required

  • An application by you, the policyholder, requesting policy cancellation.
  • Your original car insurance policy.
  • Copy of Form 29 from the road transport office that denotes the transfer of ownership of your vehicle.
  • Copy of Form 30 submitted to the road transport office, an application for intimation and transfer of your vehicle.
  • Photocopy of the vehicle’s registration certificate transferred with the new owner’s name.
  • Lastly, proof of delivery of your car.

These are the situations when you can transfer the NCB and the documents that shall be required. When purchasing a new insurance plan, use a vehicle insurance calculator to find the right add-ons necessary for your new car; after all, no vehicle can benefit from the same insurance coverage.