ARTICLE: No Claim Bonus - How to save on your insurance premiums!

[DevendraG]

Originally Posted by TorqueHP

Thank you for your response Devendra!!
========
I feel I am being played by my new insurer as the NCB certificate clearly says I am entitled for 50% bonus! At this time I have 0% NCB on both policies!

Requote from first post:

Q: I have not sold my old car and need to take delivery of a new one.

A: Go ahead and buy the new car: you cannot claim your NCB for the first year but make sure you get the NCB letter when you sell your old car. You can use the letter to reduce your second year’s premium.


I'd have thought the same but I had to read it again to understand . There is a term called NCB Loading in your Policy. Your Policy for your old car will have it as 0%. On the basis of your NCB Certificate, your new policy for your new car should have it as 50%. This means that if you do not make any claims on your new car for the first year, you're entitled for 50% NCB in the second year.

Guru's/Mods, please clarify if I'm wrong here.

[TorqueHP]

Originally Posted by DevendraG

Requote from first post:
Q: I have not sold my old car and need to take delivery of a new one.
A: Go ahead and buy the new car: you cannot claim your NCB for the first year but make sure you get the NCB letter when you sell your old car. You can use the letter to reduce your second year’s premium.

Thanks again for your response Devendra!

Actually my new insurer has returned my NCB letter asking me make the amendment as stated in my earlier post to even have it as 50% (but my old insurer says amendment is not feasible). Right now both my policies have 0% NCB and I am hoping to fix this situation quickly.

[DevendraG]

Originally Posted by TorqueHP

Thanks again for your response Devendra!

Actually my new insurer has returned my NCB letter asking me make the amendment as stated in my earlier post to even have it as 50% (but my old insurer says amendment is not feasible). Right now both my policies have 0% NCB and I am hoping to fix this situation quickly.

I can understand your ordeal TorqueHP but unfortunately I can't seem to understand why the new insurer is not accepting your NCB. Since I haven't been in this situation myself, I can't comment further. But I'm selling my car soon & I too will be in your shoes shortly.

I suggest you try another insurer just to understand whether your insurer's claims are true or not.

Meanwhile, if the mods have any suggestions, that'll be very helpful.

[srinath.s]

A friend of mine bought a used car six months ago, and got the insurance transferred to his name after paying the pro rated NCB of the previous owner. Now the insurance is up for renewal. He has not made any claims in his six months of ownership of the vehicle. Is he entitled to a NCB now?

[vasudeva]

NCB is a vicious cycle. Let me illustrate.

I have a NCB of 50% on Corolla which is now around 6K. Max is 50%.
I go for a claim and he dealer says that since total bill is 7K, I lose (6K+2K file charges). So I do cash work and pay 7K.
The same thing happens next time and so just to preserve the NCB, I pay 7K again.
Instead I could have taken a loss of 1K the first time, and saved money the 2nd time.
The point is that I have now decided that is better to take a loss on NCB the first time, and recover on the 2nd time and 3rd time.

[ghodlur]

Originally Posted by srinath.s

Is he entitled to a NCB now?

Yes, he will be entitled to NCB. If he has any NCb from previous car, then he will be entitled to next slab of NCB.

Originally Posted by vasudeva

I have a NCB of 50% on Corolla which is now around 6K. Max is 50%.
I go for a claim and he dealer says that since total bill is 7K, I lose (6K+2K file charges). So I do cash work and pay 7K.

The thumb rule always should be - If the repair cost is more than the NCB amount to be saved during next renewal, then it is always better to claim Insurance.

You would not recover any amount after the NCB goes zero. So basically you have only saved the NCB amount or 6K irrespective of the number of claims in the year.

[srinath.s]

Originally Posted by ghodlur

Yes, he will be entitled to NCB. If he has any NCb from previous car, then he will be entitled to next slab of NCB.

Nope, it is his first car. I heard somewhere that one should not have made claims for atleast one year to be eligible for NCB. Is this really the case?

[ghodlur]

Originally Posted by srinath.s

I heard somewhere that one should not have made claims for atleast one year to be eligible for NCB. Is this really the case?

Not necessarily, No claims during the current policy year=eligibility for NCB.

[TorqueHP]

Originally Posted by DevendraG

I can understand your ordeal TorqueHP but unfortunately I can't seem to understand why the new insurer is not accepting your NCB. Since I haven't been in this situation myself, I can't comment further. But I'm selling my car soon & I too will be in your shoes shortly.

I suggest you try another insurer just to understand whether your insurer's claims are true or not.

Meanwhile, if the mods have any suggestions, that'll be very helpful.

I just wanted to let you know that I finally received my NCB refund! All the inputs from Team BHPians increased my confidence to push very hard - there was some resistance but I told them I'll not hesitate to escalate the matter to IRDA - within a day there was agreement to refund although the refund itself took around a month! Thanks Devendra for your responses in particular!

[DevendraG]

Originally Posted by TorqueHP

I just wanted to let you know that I finally received my NCB refund! All the inputs from Team BHPians increased my confidence to push very hard - there was some resistance but I told them I'll not hesitate to escalate the matter to IRDA - within a day there was agreement to refund although the refund itself took around a month! Thanks Devendra for your responses in particular!

You're welcome! Glad that I could help you.

[ajmat]

Pjbiju provided some important info - added to initial post

For the people using the Employee Car Lease program, they have the option of getting the benefit of the No Claim Bonus at the end of the lease period.

The NCB can be transferred when the company is transferring the vehicle to the employee. There is an endorsement clause in the Indian Motor Tariff GR 27 (e)

(e) "The percentage of NCB earned on a vehicle owned by an institution during the period when it was allotted to and exclusively operated by an employee should be passed on to the employee if the ownership of the vehicle is transferred in the name of the employee. This will however require submission of a suitable letter from the employer confirming that prior to transfer of ownership of the vehicle to the employee, it was allotted to and exclusively operated by the employee during the period in which the NCB was earned."

This will save the employee quite a bit of money. All you need is a letter from the employer as described above.

[Horizon81]

My car insurance is expiring in two days, and I've shopped around and decided to change the provider from Bajaj Allianz with Drive Assure Economy add-on (Zero-Dep) to Tata AIG with Pearl Plus add-on (again zero dep).

I'm eligible for 20% NCB on my previous policy for which I had paid 35K as premium. But in the new quote, they have calculated NCB discount on the new proposed premium and that discount is only Rs 3500.

My understanding is that NCB discount should have been calculated from the previous premium amount. Isn't that so?

[kalyan_hyd]

Originally Posted by Horizon81

My car insurance is expiring in two days, and I've shopped around and decided to change the provider from Bajaj Allianz with Drive Assure Economy add-on (Zero-Dep) to Tata AIG with Pearl Plus add-on (again zero dep).

I'm eligible for 20% NCB on my previous policy for which I had paid 35K as premium. But in the new quote, they have calculated NCB discount on the new proposed premium and that discount is only Rs 3500.

My understanding is that NCB discount should have been calculated from the previous premium amount. Isn't that so?

NCB is in percentages, your old policy would clearly mention the NCB given to you in your last policy, if there were no claims in the past year, your NCB would move to the next bracket 10% -> 20%, 20% -> 30% and so on till it reaches 50%. In your new policy with Tata AIG, just make sure that they have moved you to the next bracket and the NCB is calculated over Own Damage(OD) so if the OD premium is say Rs 10,000.00 with NCB of 20%, you would get Rs 2,000.00 off. Whereas, in another policy, your OD for the same car could come to say Rs 20,000.00 in which case you would get a discount of Rs 4,000.00. I hope I could clarify your questions.

Originally Posted by TorqueHP

I just wanted to let you know that I finally received my NCB refund! All the inputs from Team BHPians increased my confidence to push very hard - there was some resistance but I told them I'll not hesitate to escalate the matter to IRDA - within a day there was agreement to refund although the refund itself took around a month! Thanks Devendra for your responses in particular!

Originally Posted by DevendraG

I can understand your ordeal TorqueHP but unfortunately I can't seem to understand why the new insurer is not accepting your NCB. Since I haven't been in this situation myself, I can't comment further. But I'm selling my car soon & I too will be in your shoes shortly.

I suggest you try another insurer just to understand whether your insurer's claims are true or not.

Meanwhile, if the mods have any suggestions, that'll be very helpful.

Hi TorqueHP & Devendra,

Looking from some suggestions from you guys.

It was nice to read that your(TorqueHP) NCB was refunded. I was getting into such a position myself and was looking around for experiences. My case is a little different to yours but your advice would be highly appreciated.

1. I own a Honda City from 2009 on my name and the current NCB on that is 50% as I have no claims on the car since its purchase. The policy is with Bajaj Allianz. It expires on Dec 18th, 2015.

2. I recently bought a pre-owned BMW X1. The RC just got transferred into my name and I have 10 working days to get the insurance policy changed to my name. It is valid until Sep 20th, 2015.

3. I was planning to cancel the policy on my Honda City and get the NCB letter while renewing the policy with 0% NCB. How does the cancel on the current policy work, does it get cancelled from say the night I make the call and can I get the new policy to start the same night without any continuation issues? I plan to retain Bajaj Alliaz as the provider for both the cars.

4. Now, should I go ahead and initiate the transfer of the previous insurance on the BMW to my name and use the NCB letter while renewing the policy in September. Or, should I wait for the NCB letter to arrive for the insurance on Honda City and use that now itself to get the current policy on the BMW transferred to my name with the NCB. I am not looking for a pro-rated refund as the previous owner had 0% NCB since the period of covered insurance left-out on the new car is less than a month.


Thanks & Regards,
Kalyan

[Horizon81]

Originally Posted by kalyan_hyd

I hope I could clarify your questions.

Very much, Kalyan. Looks like there is very little to choose between Bajaj Allianz and Tata AIG in terms of coverage and when it comes to premium, Bajaj is about Rs 1500-2000 pricier than Tata AIG. So I may very well continue with them since they are my current provider and also the preferred provider for the garage I'm servicing the car at. Thanks a lot for your help.

[ghodlur]

Originally Posted by Horizon81

My understanding is that NCB discount should have been calculated from the previous premium amount. Isn't that so?

It is not. NCB is always applicable on the amount of Insurance premium for that year. As clarified, it is calculated as a percentage of the OD premium. So as you IDV decreases year on year, NCB discounts rises based on % applicable in case of claim free years.

Originally Posted by kalyan_hyd

1. I own a Honda City from 2009 on my name and the current NCB on that is 50% as I have no claims on the car since its purchase. The policy is with Bajaj Allianz. It expires on Dec 18th, 2015.

2. I recently bought a pre-owned BMW X1. The RC just got transferred into my name and I have 10 working days to get the insurance policy changed to my name. It is valid until Sep 20th, 2015.

3. I was planning to cancel the policy on my Honda City and get the NCB letter while renewing the policy with 0% NCB. How does the cancel on the current policy work, does it get cancelled from say the night I make the call and can I get the new policy to start the same night without any continuation issues? I plan to retain Bajaj Alliaz as the provider for both the cars.

4. Now, should I go ahead and initiate the transfer of the previous insurance on the BMW to my name and use the NCB letter while renewing the policy in September. Or, should I wait for the NCB letter to arrive for the insurance on Honda City and use that now itself to get the current policy on the BMW transferred to my name with the NCB. I am not looking for a pro-rated refund as the previous owner had 0% NCB since the period of covered insurance left-out on the new car is less than a month.

Kalyan,

let me answer your queries for points 3 & 4

Answer to point#3: The cancelling of the Current Insurance does not happen overnight unfortunately. You will need to submit an application for the current Insurance cancellation and request for the NCB letter. Once the insurance is cancelled , you will need to buy a TPL only insurance for the Honda city as bare minimum requirement. This policy can be bought online too so the cover will start form the time the policy is issues. So this takes care of the Honda City Insurance.

Answer to point#4: You will need to initiate the transfer of the existing Insurance from previous owner to your name. Anyways you wont be paying for the Insurance on the BMW till the present insurance expires. Once you get hold of the NCB letter from BA (which you need to expedite since the BMW insurance expires in the coming month), you can renew the Insurance for the BMW from BA using the NCB eligibility.

So this way both the cars will be covered by BA. I must admit your fascination to stick to only one Insurance co in these competitive times. I also assume you must have confirmed that both the car workshops have cashless tie up with BA.