Sold Your Old Car for a New One? Know How to Claim NCB Under Your Car Insurance


The classification of cars has started to change from a luxury item to more of a necessity in today’s day and age. With cities and towns expanding, it is a necessity to have a personal vehicle. Reliance on public transport can often cause delays. Hence, personal form of transportation is necessary. While a two-wheeler is capable of doing the same job, it does not offer the convenience as compared to a car. In addition, cars are useful when you want to travel not alone but with family or friends. These are some benefits of having a car, however, there are a few mandatory requirements of registration and insurance for all car owners.

As newer models of cars are launched, car enthusiasts tend to sell their old car for a newer one. While some do it for a newer model in their garage, others do it to avoid a lower resale value. In either case, it becomes essential to transfer the no-claim bonus in their car insurance policy.

What is the no-claim bonus?

No-claim bonus or popularly referred as NCB is the concession offered by the insurance company at the time of renewal if zero claims are made during a particular policy period. To simply state, it is a benefit that the insurance company passes because you do not make any claims during the previous policy tenure. This benefit can be accumulated over the years to further lower the car insurance prices.

What is the process of transferring the NCB?

The NCB transfer process can either be done during the policy period or at the end of its tenure. On cancellation of your policy, an NCB retention letter is issued by the insurer. On presenting this letter to the new insurance company, your accrued and accumulated NCB can be transferred.

The following documents are required to issue an NCB retention letter:

  • Request letter for policy cancellation in case of transfer during the tenure.
  • Original copy of the existing car insurance policy
  • Form 29 of the RTO that mentions the notice of transfer of vehicle’s ownership
  • Form 30 of the RTO which is an application for transfer of the ownership.
  • Amended registration certificate with name of new owners.
  • Copy of delivery note.

You can visit the official website of IRDAI for further details

A few pointers to remember about NCB

  • No-claim bonus is linked to the policyholder and not the vehicle. Thus, such NCB is not passed to the buyer but can be retained by you for your new car. When selling your car, the insurance policy can be transferred, however, such NCB benefits are not transferred. Therefore, all new car owners will be required to pay the full amount of the insurance premium. *
  • After the sale of your car, the insurance company issues an NCB transfer certificate which is valid for a maximum period of three years. This certificate can be used for during the next three years when you buy a new car to lower its premium. *
  • The NCB benefits of a car insurance plan can be transferred only to another car and not a bike or scooter. The transferability of the NCB benefits is across the same category of the vehicle and not otherwise. *

* You can visit the official website of IRDAI for further details

With these benefits of NCB, you can opt for car insurance renewal online reducing the hassle of physically renewing the policy. NCB benefits can also be transferred to your new car thereby offering continued benefits over your car ownership experience. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

Leave a Reply

Your email address will not be published. Required fields are marked *