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

You might have heard it numerous times that motor insurance policy is a mandatory requirement to legally drive a car. A motor insurance policy takes care of unfortunate events that cause damage to you and your vehicle. But it is not always that you meet with an accident and require to make a claim. Accidents are rare and at other times, you can reduce your insurance premium by availing no-claim benefits. No-claim bonus is the facility where the insurance company offers a concession in 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, is it possible to take advantage of your accrued no-claim bonus on your new car? The simple answer is ‘yes’. NCB benefits can be transferred to your new car. A policy’s no-claim benefits are linked to you, the policyholder, and not the vehicle.

Which 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. If you have accumulated no-claim bonus on your old car insurance policy which can be transferred to your new policy on the sale of your old car. In this situation, the NCB benefits can be retained from your old car. 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 own-damage premium of you new car.
  2. If you have accumulated NCB on your old car but want to transfer it to your new car while retaining the old car. This is a case where you own both cars but just want to transfer the NCB. Since these benefits are linked to the policyholder, only one of the cars can avail 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 a third party car insurance online, no NCB benefits will accumulate which can be then transferred. As discussed above, the NCB benefits can only be transferred 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 for policy cancellation.
  • Your original car insurance policy.
  • Copy of Form 29 from the road transport office that denotes transfer of ownership of your vehicle.
  • Copy of Form 30 submitted to the road transport office which is an application for intimation and transfer of your vehicle.
  • Photocopy of the registration certificate of vehicle transferred with the name of the new owner.
  • Lastly, proof of delivery of your car.

These are the situations when you can transfer the NCB as well as the documents that shall be required. When purchasing a new insurance plan, make sure to use a vehicle insurance calculator to find the right add-ons that are required for your new car; after all, not cars can benefit from the same insurance coverage.