FAQs in motor insurance

The following are some of the frequently asked questions in motor insurance, compiled from IRDAI’s website:

What is ‘no claim bonus’ in motor insurance?

No claim bonus (NCB) is the benefit accrued to an insured for not making any claims during the previous policy period. As per the current norms in India, it ranges from 20 per cent on the own damage premium and progressively increases to a maximum of 50 per cent. If, however, a claim is lodged, the NCB is lost in the subsequent policy period.

NCB is given to the insured and not to the insured vehicle. Hence, on transfer of the vehicle, the insurance policy can be transferred to the new owner, but not the NCB. The new owner has to pay the difference on account of NCB for the balance policy period. The original owner can, however, use the NCB on a new vehicle purchased by him.

Will my NCB get migrated if I want to change my insurance company?

Yes, you can get the NCB facility if you change the insurer on renewal. You would have to produce proof of the NCB earned by way of renewal notice from the current insurer. Alternatively, you can produce your original, expiring policy along with a certification that you have lodged no claims on the expiring policy. For this, the proof can be in the form of a renewal notice or a letter confirming the NCB entitlement from the previous insurer.

Are there discounts that will lower my own damage premium?

In addition to NCB, there are additional discounts available under own damage premium for membership of Automobile Association of India, vintage cars (private cars certified by the Vintage and Classic Car Club of India); installation of anti-theft devices approved by Automobile Research Association of India (ARAI), Pune, and whose installation is approved by AAI; concessions for specially designed/modified vehicles for the blind, handicapped and mentally challenged persons, which are suitably endorsed in the RC by the RTA concerned; opting for voluntary additional deductible/excess.

If I fit CNG or LPG kit in my vehicle, is it necessary to inform the insurance company?

If a CNG/LPG kit is fitted, the Road Transport Authority office where the vehicle was registered should be informed so that they make a note of the change in the registration certificate of the vehicle. The insurance company should also be informed so that the kit is covered on payment of extra premium.


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