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Old 11th October 2017, 12:11   #61
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Default Re: Car Insurance - Possible NCB (No Claim Bonus) Loophole?

Apologies for bumping an old thread.

I owned a car and I was enjoying 50% NCB on the car's insurance. I Sold the car and the new owner purchased insurance for himself from another insurer.

When I contacted the insurance company from which I had insured my car (and enjoying 50% NCB) for an NCB certificate, they want a NCB recovery fee to be paid in-order for them to issue such certificate.

I checked the IRDA website, and as per the website http://www.policyholder.gov.in/Faqli...?CategoryId=78

Quote:
Q.Can I transfer my insurance to the purchaser of my vehicle?
A. Yes, the insurance can be transferred to the buyer of the vehicle, provided the seller informs in writing of such transfer to the insurance company. A fresh proposal form needs to be filled in. There is a nominal fee charged for transfer of insurance along with pro-rata recovery of NCB from the date of transfer till policy expiry. It may be noted that transfer of ownership in comprehensive/package policies has to be recorded within 14 days from date of transfer failing which no claim will be payable for own damage to the vehicle.
Now in the above scenario where one is transferring current insurance of the car to the new owner, a recovery fee is required because the new owner is not eligible for NCB enjoyed by the old owner This makes perfect sense.

However, when no transfer of insurance is made and just for issuance of a letter, why should I pay a hefty recovery fee?

Any inputs / suggestions?

Thanks!
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Old 11th October 2017, 13:08   #62
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Smile Re: Car Insurance - Possible NCB (No Claim Bonus) Loophole?

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Originally Posted by timj View Post
However, when no transfer of insurance is made and just for issuance of a letter, why should I pay a hefty recovery fee?
The Insurance co is right in recovering the NCB amount on pro rata basis. the NCB amount applied to your Insurance premium was the complete policy year. If you sold your vehicle in the policy year and transfer/not transfer the Insurance, the Insurance co has every right to recover the amount you claimed under NCB.

No need to make an issue out of this, suggest to just pay the amount and use the NCB accumulated during the Insurance purchase for the new vehicle.
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Old 11th October 2017, 13:30   #63
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Default Re: Car Insurance - Possible NCB (No Claim Bonus) Loophole?

Thanks a lot for your response.

Quote:
The Insurance co is right in recovering the NCB amount on pro rata basis. the NCB amount applied to your Insurance premium was the complete policy year. If you sold your vehicle in the policy year and transfer/not transfer the Insurance, the Insurance co has every right to recover the amount you claimed under NCB.
If I transfer out my policy to the new owner, makes sense to recover the NCB discount given to me. But I don't get any business or logical sense when I am not transferring my policy. The policy is paid up completely till Jan 2018 and no claim is going to be made on that policy since it’s not active at all. The insurance company is enjoying the money I have paid in advance and not at a loss, then why does it have to recover money from me?

On the converse, as per my reading and understanding, if I request them to cancel the policy, they will have to refund money paid up on a pro-rata basis for the remaining covered months, right?

Last edited by timj : 11th October 2017 at 13:31. Reason: typo fix
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Old 11th October 2017, 13:47   #64
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Smile Re: Car Insurance - Possible NCB (No Claim Bonus) Loophole?

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Originally Posted by timj View Post
The insurance company is enjoying the money I have paid in advance and not at a loss, then why does it have to recover money from me?

On the converse, as per my reading and understanding, if I request them to cancel the policy, they will have to refund money paid up on a pro-rata basis for the remaining covered months, right?
The Insurance co is only keeping the money rightfully applicable to them and not the entire amount.

Yes, you can cancel the policy and the premium paid will be refunded on pro rata basis minus the NCB amount deducted on pro rata basis. Please note there are certain components of the Premium which will not refunded i.e Legal Liability to Paid driver
Also the policy can be cancelled upon producing the evidence that the vehicle has been sold and the Insurance copy which the new owner has bought on his own for the said vehicle.
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