Team-BHP (
-   On buying a car (
-   -   ARTICLE: No Claim Bonus - How to save on your insurance premiums! (

ajmat 1st November 2006 13:12

ARTICLE: No Claim Bonus - How to save on your insurance premiums!
Do you know you can save as much as 65% on your new car’s insurance? Your insurance agent will never tell you that you can transfer a No Claim Bonus (NCB) from your old car, but a fellow Team-BHPian paid only Rs.10,700 for Rs.27,000 worth of comprehensive insurance on his new car. He just transferred the NCB from his old Maruti Zen to reduce the cost of insurance for his Honda City Vtec. Why didn’t his friendly agent volunteer information about this remarkable deal? Because the more a buyer pays the insurance company, the more commission its agent makes.

Most Indian car buyers negotiate on financing, dealer discounts and freebies but forget about the insurance component.

Team-BHP shows you how to use the NCB to save on your insurance premium:

1. When you sell your old car:
The biggest mistake people make is transferring the insurance lock stock and barrel when selling a car. Ensure that ownership is transferred and make a photocopy of the new entry in the RC book for insurance purposes.

2: Obtain the NCB certificate: Forward a copy of the delivery note to your insurance company and ask for the NCB certificate or holding letter. This letter is valid for three years; you may find it easiest to go to your insurer’s local office to pick it up in person.

3: Use the NCB:
Forward the NCB letter to your new car’s dealer. Voila! You have just transferred the NCB to your new car insurance and saved a bundle.

Remember to shop around; manufacturers’ insurance schemes are much cheaper than regular insurers’. In one case, insurance for an old Maruti 800 was quoted at Rs.4,800 when the official Maruti insurance was available for just Rs.2,800.

Another process, if you are happy with your existing insurance company, is to go to the insurer with your new car invoice and chassis number. The agent should use your NCB to offer a reduced premium and give you a cover note on the spot. The dealership will need this cover note to register your car with traffic authorities.

Insurance Tip: If you are buying a premium car, it would be wise to opt for zero depreciation car insurance. After all, premium cars are equipped with premium-priced parts. Click HERE to read up on a positive experience with this type of insurance policy.


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.

Q: The NCB is a major saving – how can I preserve it?

A: A No Claim Bonus means just that – no damage claims on your car. Drive carefully, take security measures to protect your car and claim judiciously. If you have a 50% NCB for your Getz you are saving Rs.9,000. If your stereo is worth Rs.5,000 and gets stolen, do not claim it. Just pay for the new stereo yourself; it will cost less than losing the NCB saving.

Q: I have a cheap Maruti 800 with a 50% NCB and want to buy a Honda City while keeping both cars.

A: One option to consider is to cancel the insurance on your Maruti and claim the NCB certificate for your Honda while insuring the Maruti with a different company. Another alternative is to transfer the Maruti’s ownership and insurance to your spouse or sibling and proceed as above.

Q: What about those free insurance schemes?

A: Try asking for a cash discount instead and buy your own insurance. The next best option is to use the NCB certificate during insurance renewal.

NCB when transferring a company vehicle to the employee:

People using an Employee Car Lease program have the option of getting the benefit of the No Claim Bonus at the end of the lease period. Thanks to BHPian pjbiju for sharing this info.

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.

GTO 1st November 2006 15:14


a fellow Team-BHPian paid only Rs.10,700 for Rs.27,000 worth of comprehensive insurance on his new car.
For the record, Ajmat means me. I was about to sign on a 27000 cheque when Ajmat told me "Hey, have you used the NCB option?". Saved 17000 in a shot.

Thanks Ajmat.

tifosikrishna 1st November 2006 16:07

I would like to add one more thing. You are eligible to transfer your NCB even across insurance companies that comes under the GIC umbrella.

To quote an example, my previous car (tata indica) was insured with national insurance, when i sold it, i got the NCB from national insurance and produced the same to my new insurer (United India Assurance), got a Rs.30% or around Rs.8000 on my new car(mahindra scorpio).


dr fate 2nd November 2006 00:28

My many thanks for the information,i am cursing myself cause i have never made a claim in my life but i have changed many cars in my life recent one being on 29th last month,

iam thinking how much i could have saved if this article had come earlier sigh......

nitrous 2nd November 2006 01:02

Same here.
Its a major eye-opener for me. I never knew this existed.

BMW 2nd November 2006 08:01

Thanks ajmat! Never knew about this...

ScarySkulls 2nd November 2006 10:33

I am currently in the 65% rebate bracket.
Never claim for any minor damages. Saves you LOTS in the long run.

ajmat 2nd November 2006 11:03


Originally Posted by ScarySkulls
I am currently in the 65% rebate bracket.
Never claim for any minor damages. Saves you LOTS in the long run.

.............and you get better treatment in the unlikely event of having to make claim. The MNC insurance companies have long memories

aZa 2nd November 2006 11:20

nice stuff ajmat... !!! major eye opener

w 12 2nd November 2006 13:19

I have a NCB of 65% in my car insurance ... Not one claim over past 11 years and 5 cars

Have been transferring insurance to the latest car to take benefit of this..

Another trick if you have more than a car in your name - transfer the policy with highest NCB to the most expensive car in your house..and take a new policy at the depreciated cost of the old car.. you will definitely save some money.

( you can transfer your 2 wheeler insurance as well !! )

sportive_guy30 2nd November 2006 18:01

Thank you very much ajmat. I made this mistake.

w 12: you said...>> you can transfer your 2 wheeler insurance as well !!

Is this possible? So can use my Splendor NCB for new honda city? Has any one used existing two wheeler NCB for car? If yes how much can we save?

Please let me know.


GTO 2nd November 2006 18:15

Think about it:

1. Its only logical that the risk (and therefore premium) on no-claimers should be less.

2. Its also a way for Insurance co's to demotivate you from making frequent claims. When a coconut broke the rear windscreen of my Honda, I didnt claim.

w 12 2nd November 2006 18:33


Originally Posted by sportive_guy30
Is this possible? So can use my Splendor NCB for new honda city?

I meant you can transfer the insurance of your old 2 wheeler to that of your new upgraded one , when you buy one , maintaining the same no claim bonus as the old one.

I dont think you can transfer NCB from 2 wheeler to 4 wheeler.

For example My Bullet although only 3 years old , has a NCB of 65% as I transferred same ploicy from My Earlier Shaolin - Shogun -kinetic honda - RD 350

black12rr 2nd November 2006 19:36

Gurus one more info need . Does NCB % increase every year ?
Like for example this year the insurance compay will give 5 % NCB .
Next year if you dont claim anything ,it will be 10 % and next year 15 % and so on ?
Awesum ,i love this forum :)

hyper-VTEC 2nd November 2006 19:40

Wow! I never knew that NCB can be transferred. So if i have 30% on my existing WagonR and i decide to go for a new car, and transfer the NCB, they deduct 30% from the total insurance amt. of the new car? Thats awesome ajmat...Thanks

All times are GMT +5.5. The time now is 06:52.