Skip to main content

For every year of no claim, the car owner gets discount on next year’s premium till it reaches 50 per cent of the first premium

If you thought a good conduct certificate was earned only in school, think again! As a vehicle owner, you are rewarded for good conduct too. Ever heard of the no claim bonus (NCB)? As the name suggests, an NCB is an incentive to vehicle owners in the form of discounted premiums upon renewal of the insurance. So, if you have not made any claims for a whole year, your premium while renewing your vehicle insurance for the subsequent year reduces.

Not very many agents are trained and therefore the customer is unaware of the NCB.

UNIFORM DISCOUNTS

The discount rates are uniform across all companies. At the end of the first year, your NCB is 20 per cent. With every subsequent year (of no claims), your NCB increases to 25 per cent, 35 per cent and 45 per cent at the end of the second, third and the fourth year of renewal respectively. The NCB can reach a maximum of 50 per cent (at the end of the fifth year). Of course, if you break the chain once, then your NCB automatically goes back to nil.

An NCB can be transferred only from one insurer to another but not between owners when your vehicle is sold. Explained Ajay Shah, vice president, customer service, motors, ICICI Lombard General Insurance: If you sell your car, you retain the NCB. You can, of course, sell the insurance to the new owner.

An NCB is forfeited only in two cases: If there is any claim made during the year or if there is a break in the insurance period of more than 90 days beyond the expiry date of the previous policy. Many a time, a minor accident/incident is not claimed by the owner, as he may have a high NCB.

Previously, my insurance company used to dispatch a letter before the time of renewal, informing us about our NCB. That has stopped now. Intense competition among motor insurance providers has led to competitive pricing of premiums. This, has caused customers to shift from one insurance provider to another.

So, make note of these if you are a vehicle owner:

NCBs can be retained post vehicle sale. Say, you are selling your vehicle and have no immediate plans of purchasing anew one. You have the option of retaining your NCB for a maximum of three years. All you need is a letter from the insurance company stating so.

You can transfer the NCB at the time of renewal. An NCB you have accumulated while with your earlier insurer is taken into account while taking the new insurance. You must provide evidence from your old insurer. This could be a renewal notice, a letter confirming the NCB entitlement or a written declaration.

NCB can be transferred without change in ownership. If you purchase a new car without selling your old car, you can transfer the NCB to the new car. However, you are to return the bonus for the unexpired period of the insurance.

You can transfer an NCB in the middle of the term. If you shift to another insurer in the middle of the term, you can retain the same percentage of NCB in the new policy, subject to cancellation of the old policy.

According to some insurers, the three-year retention period is directly related to the skill of the driver. A big disadvantage is that you can only shift an NCB to your new vehicle if you are buying in the same category (two-wheeler to two-wheeler or a four-wheeler to four-wheeler). If you upgrade to a four-wheeler from a two-wheeler, the NCB is not valid. You are being rewarded for being a good two wheeler driver. The presumption is that when you migrate to a four wheeler, you are, comparatively, a novice.


Popular posts from this blog

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

WEALTH TAX

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now