No Claim Bonus (NCB) in Commercial Vehicle Insurance

How Does NCB in Commercial Vehicle Insurance Work?

Here is how NCB in commercial vehicle insurance works:

• NCB is not offered with third-party commercial vehicle insurance. It only reduces the OD premium in a comprehensive policy.
• You can get a 20 to maximum 50% discount on renewal.
• The no claim bonus becomes 0 as soon as you file a commercial vehicle insurance claim

How to Calculate NCB for Commercial Vehicle Insurance?

The renewal premium of the own-damage component in a comprehensive commercial vehicle insurance is decided based on the accumulated NCB. You can get up to 50% NCB discount with your policy if you have 5 or more consecutive claim-free years. Insurers offer 20% discount in the first year, and increase by 5-10% every year. The standard NCB percentage for all motor insurance plans is decided by the IRDAI based on the following table:

Here is how you can understand the NCB discount. If the own-damage premium for your commercial vehicle insurance is Rs. 55,000 and you do not raise any claims, the renewal premium for the 2nd year will be calculated with the applicable NCB as per the following table:

What are the Benefits of NCB in Commercial Vehicle Insurance?

Check out the benefits of no claim bonus in commercial vehicle insurance below:

• Lowers Premium: The NCB discount helps in reducing your commercial vehicle insurance premium during renewals.
• Encourages Safe Driving: The discount motivates commercial vehicle owners to drive safely, which minimises the need to file a claim and ensures higher discount for consecutive claim-free years.
• Transferable Benefit: The no claim bonus of a commercial vehicle insurance is linked to the policyholder and not the vehicle. This ensures that the discount can be easily transferred when you buy a new commercial vehicle or switch your insurer. However, you cannot transfer the NCB to the new owner if you sell the insured commercial vehicle.

How to Transfer NCB in Commercial Vehicle Insurance?

You can transfer your no claim bonus using the following steps:

• While renewing your commercial vehicle insurance, provide your previous policy number, correct NCB percentage, and the name of your previous insurer to the new insurer.
• The new insurer will verify your claim-free history and transfer your eligible NCB to the renewed policy.

Note: NCB is linked to the policyholder and is transferable between commercial vehicle insurance companies.

Documents Required for NCB Transfer in Commercial Vehicle Insurance

Here are the documents required to transfer NCB in commercial vehicle insurance:

• Duly filled NCB transfer form
• Copy of the existing commercial vehicle insurance policy
• NCB Certificate issued by the previous insurer
• Previous policy details
• Registration Certificate (RC) of the commercial vehicle
• Ownership transfer documents (if the NCB is being transferred when the commercial vehicle has been sold or ownership has changed)

How to Protect NCB in Commercial Vehicle Insurance?

Filing an own damage claim resets your accumulated NCB to 0. However, you can follow these tips to protect your NCB in commercial vehicle insurance:

• Drive Safely: Encourage safe driving practices among drivers to reduce the risk of accidents and claims.
• Avoid Minor Claims: Consider paying for small repairs, such as minor dents or scratches, out of pocket instead of filing an own-damage claim if it is financially viable.
• Renew the Policy on Time: Renew your commercial vehicle insurance before the due date. You will lose your NCB if you renew after the break-in period.
• Add-On: Several insurers offer commercial vehicle insurance add-ons, such as the NCB Protector to avoid losing your NCB even if you file a claim.