transfer of no claim bonus to new car

Procedure for Transferring of No Claim Bonus (NCB)

Most people are unaware about the benefits of ncb.

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No Claims Bonus Explained

What is a no claims bonus (NCB)? Are You Entitled to a Discount? Learn everything you need to know about your Car Insurance No Claims Bonus at Top Insure.

Are you getting the most out of your Car Insurance Policy ? Did you know that you could be entitled to a significant discount on your premium? In this comprehensive guide to the No Claims Bonus in Ireland, we’ll explain everything you need to know about Car Insurance (NCB), sometimes referred to as No Claims Discount (NCD).

No Claims Bonus – What Does It Mean?

Simply put, a No Claims Bonus or NCB is a reward for good driving. The longer you drive, without making a claim on your car insurance policy, the higher the rewards will be. These ‘rewards’ are then discounted from your car insurance premium, saving you money when you renew.

The value of NCB varies from provider to provider. And while you can build up your no claims bonus over an unlimited number of years, many car insurance providers in Ireland base their discounts on a maximum of 5-years, and so it is a good idea to find this out when comparing car insurance quotes.

Who Can Claim NCB?

Anyone with a valid motor insurance policy can earn no claims discounts. For every year that you drive, without making a claim on your insurance, you will earn another year’s NCB, but there are some restrictions.

No claims bonuses are, in most instances, only applicable to the policy holder. Discounts can only be used on one vehicle, and most insurance companies will not allow you to claim for company vehicles or as a Named Driver, so again, this is something to discuss with your insurance provider.

How Is My No Claims Bonus Affected if I Make a Claim?

As the name would suggest, your no claims bonus is a reward for not making a claim on your car insurance policy. If you do make a claim, or if someone makes a claim against you, and your provider has to pay out, your NCB will be affected, or lost altogether.

Individual circumstances vary here, and if it is proven that you were not at fault, your no claims discount may not be affected, particularly if your provider is able to reclaim costs from the other party’s insurer.

How to Protect Your No Claims Bonus

With a no-claims history of 5-years or more, you are likely to get a noticeable reduction on your motor insurance premiums, and so many drivers are prepared to pay a fee keep it. In Ireland, most car insurers will give you the option to protect your NCB for an additional fee, with both Full No Claims Bonus Protection Plans and Step Back Bonus Protection Plans available.

• Full No Claims Bonus Protection Plan : Designed to give motorists peace of mind, this fully comprehensive plan protects your no claims bonus and the discounts associated with it, even if a claim is made against you. It allows you to have a limited amount of ‘at fault’ incidents within a specific time-frame, without affecting your NCB, but it comes at a price. All no claims bonus protection plans include a list of exceptions and limitations, and so you should read the small print before signing on the bottom line.
• Step Back Bonus Protection Plan : Motorists in Ireland have a second option for protecting their no claims bonus, with step back protection. Less costly than full no claims protection, this plan offers a lower level of cover, but ensures you do not lose all of your no claims discount in the event that a claim is made against you. For example, if you currently have five years of claim free driving, and you make a claim, your NCB could be reduced to three years under this type of plan.

What Happens if I Change My Car or Insurance Provider?

Your no claim bonus can be transferred to another car, and in most instances, it can be transferred to another car insurance company, although most insurers require proof in the form of an NCB Certificate, which should be provided by your insurer at the end of your policy term.

When Will My No Claims Discount Expire?

In Ireland, your no claim bonus is valid for 2-years from the date of expiration of your last car insurance policy. This means, that if you do not drive for a period of two years or more, your NCB will expire, and you’ll have to start all over again when you re-apply for car insurance.

Some insurance providers may honour your no claims discount if you haven’t been driving due to reasons beyond your control, such as illness or working overseas, so check with your car insurers to see where you stand on this.

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What is 'No Claim Bonus'

Definition: No-claim bonus (NCB) is a discount in premium offered by insurance companies if a vehicle owner has not made a single claim during the term of the motor insurance policy. Description: The no-claim bonus is a reward to the vehicle owner for prudent use of the vehicle. For example, if you sell a 10-year old hatchback and purchase a C-segment car, the no-claim bonus will pass on to the new vehicle and you can save considerably on your insurance costs. It can be transferred to another insurance company subject to evidence in the form of a renewal notice or letter, confirming the NCB entitlement from the previous insurer. This discount in the premium is usually 20% for the second year, 25% for the third year, 35% for the fourth year, 45% for the fifth year and 50% for the sixth year. The value of the discount depends upon the insurance claims you have made in that particular year. NCB can be carried forward and will be only allowed provided the policy is renewed within 90 days of the expiry date of the previous policy. Also See: 3rd Party Insurance, Surrender Value, IRDA

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Why can’t I get a no-claims bonus on my second car?

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I bought a second car and found an insurance quote . I sent a copy of the insurance certificate for my other car showing 10 years’ no-claims discount (NCD) but was told I would have to pay almost £90 more because I needed to build up an NCD on my new car. How can I have 10 years driving one vehicle and none driving another?

VW, Leicestershire

Unfortunately, that’s the way it works. Although you’d think an NCD reflected your skill as a driver rather than what wheels you drive, it actually applies to a single vehicle. You can usually transfer it if you replace a car but not add it to a second car.

There are insurers who will allow you to mirror your NCD on a second car if you buy a multicar policy, so it would be worth asking the insurer of your other car what they can offer.

Otherwise, shop around for a deal on both vehicles when your existing insurance comes up for renewal.

If you need help email Anna Tims at [email protected] or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number. Submission is subject to our terms and conditions

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The No-Claims Bonus: All Your Questions Answered

The no-claims bonus, also known as no-claims discount , might come with a degree of perplexity if the insured does not know the full works on how such a bonus is allocated.  To dispel any hearsays , our insurance representatives have summed up most of the common questions our clients have, to help you understand the works behind this bonus and make the right questions to your insurer.

#1. WHAT IS A NO-CLAIMS BONUS?

A no-claims discount recognises the number of years an insured hasn’t made a claim on his vehicle. This bonus is allocated to car insurance policy holders on every private and commercial insurance policy when no claims are lodged.  

#2. HOW IS THE NO-CLAIMS BONUS CALCULATED?

A policy holder earns a discount every year upon motor insurance policy renewal if no claims are made within those twelve months. Each subsequent 12-month period, an additional discount percentage is allocated. The ability to earn the full no-claim bonus depends on the type of policy issued, however, no-claims discounts are normally capped at five years. Best to check with your insurance provider on how your policy calculates the no-claims discount.

#3. HOW IS A NO-CLAIMS BONUS LOST?

Once a claim is lodged, upon renewal of the following year, the no-claims bonus will be stepped down. In order to have the no-claims discount stepped up again, the policyholder needs to have a full 12-month period claims free. This can be avoided if no claim bonus protection is purchased. Contact our insurance team for further information.

#4. MAY I ASK MY INSURER TO TELL ME MY NO-CLAIMS DISCOUNT VALUE?

Yes, your insurer would be able to tell you the percentage currently reached of the no-claims discount, as well as the number of years of entitlement.

#5. DOES THE NO-CLAIMS BONUS APPLY FOR CAR INSURANCE OR DO OTHER POLICIES BENEFIT FROM SUCH A DISCOUNT?

The concept of no-claims bonus is mainly available for car insurance policies. However, certain boat insurances also benefit from such a discount. Should you be a boat owner, ask your insurer to inform you about no-claims bonuses allocated with your marine insurance policy.

#6. CAN A NO-CLAIMS DISCOUNT BE ALLOCATED TO MORE THAN ONE CAR?

A no-claims bonus is allocated only to one policy. Someone who owns two or more vehicles, would have separate policies for each car. Hence, if one car has been involved in a collision, only the no-claims to that particular car under its specific insurance policy will step back. The no-claims discount of the other vehicles will remain intact.

#7. I JUST BOUGHT A NEW CAR TO REPLACE MY PREVIOUS ONE. WILL THE NO-CLAIMS DISCOUNT STILL APPLY IF I TRANSFER MY CAR INSURANCE POLICY TO COVER THE NEW VEHICLE?

A no-claims bonus can be transferred from one vehicle to another. The insured may transfer his/her motor insurance policy to cover the new car and the no-claims discount will still apply.

#8. WILL THE NO-CLAIMS DISCOUNT APPLY IF I CHANGE THE POLICY HOLDER OF A VEHICLE?

A no-claims bonus is earned by the policyholder and it can only be transferred in certain specific circumstances, such as between spouses. Speak to your insurer for further details.

#9. IN THE CASE OF AN ACCIDENT, WHO LOSES THE BONUS: THE POLICYHOLDER AT FAULT OR THE VEHICLE OWNER WHO OPENS THE CLAIM?

A no-claims bonus, as the name suggests, is linked with the setting of claims under a specific policy, not to fault. Consequently, a no-claims discount is lost once a claim is registered by a policyholder, whether at fault or not. Nonetheless, if a policyholder is covered with a comprehensive insurance policy and if the insurer is successful in recovering all the costs from the party at fault (or their insurers), then the no-claims bonus difference is refunded to the policyholder.

#10. DOES A POLICYHOLDER GET A NO-CLAIMS BONUS ONLY WITH COMPREHENSIVE INSURANCE POLICIES?

Various motor insurance policies benefit from a no-claims discount, not just comprehensive ones.

Have any questions which we didn’t delve into here? Send us a message on Facebook or contact us so our insurance staff will resolve any issues you might have.

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No-claims discount/bonus (NCD/NCB) calculation methods + FAQs 2022

If you drive or own a vehicle in Hong Kong, surely you must have seen the terms NCD/NCB/no-claims discount in your car insurance documents, but how can you qualify for this premium discount? How is NCD calculated? Under what circumstances will your NCD not be extended? The experts at Kwiksure will answer these questions, and more, in detail for you here.

NCD/NCB explained ｜ How NCD/NCB is calculated

How will making a claim reduce my NCD/NCB? ｜ Can my NCD/NCB be transferred?

What is NCD protection? ｜ Should I claim compensation after an accident?

No-claims discount (NCD/NCB) explained

As the name implies, NCD/NCB means that when a policyholder has not made a claim for a period of time (in years), the insurer will provide a premium discount of a corresponding percentage when the policy is renewed in the following year, usually 20% - 60% .

NCD/NCB used to be unique to auto insurance , but it was later applied to other insurance categories as well, such as medical insurance . NCD and NCB are actually the same thing, but insurers now use "no-claims discount/NCD" to highlight its discount nature and prevent policyholders from thinking that their insurer will offer monetary rewards.

Since NCD can significantly reduce your annual car insurance premiums, you should clearly state how much NCD you have when getting a car insurance quote to ensure that the quote is accurate.

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NCD calculation method

The NCD discount rate varies from one insurer to another, but it increases year-on-year from 20% all the way up to a maximum of 60%. The calculation method of the NCD is also slightly different for private cars, motorcycles , and commercial vehicles . The latter starts at 10% and gradually reaches a maximum of 30%.

NCD for private cars/motorcycles/commercial vehicles

Related article:  Car License Renewal: Application Process, License Fees and Documents

How will making a claim reduce my NCD?

1. under the following circumstances, your ncd will be reset to zero when you renew your policy the following year:.

• If you make 1 claim in the policy year while having 40% NCD or less
• If you make 2 claims in the policy year while having 50%/60% NCD

2. Under the following circumstance, your NCD will be reduced when you renew your policy in the following year:

• If you make 1 claim in the policy year while having 50%/60% NCD, your insurer will deduct a part of your NCD following their “discount reduction mechanism”.
• 60% NCD becomes 30% at the following year’s renewal
• 50% NCD becomes 20% at the following year’s renewal

Keep in mind that the above NCD "discount reduction mechanism" typically applies only to private cars. With other types of vehicles, the NDC will typically be lost in the following year, provided a claim has been made.

Is NCD transferable?

Transfer from a local insurer.

If you want to switch insurers, you only need to purchase a new policy within 12 months of the end or cancellation of the old policy, and provide proof of your original NCD (such as your old policy), you will then have an opportunity to transfer your NCD to the new insurer. However, the method for calculating NCD may be different for each insurer.

Transfer from an overseas insurer

For foreigners who have just arrived in Hong Kong, the steps for transferring NCD are similar. To enjoy the same NCD with your new insurer, you will need to ask your previous insurer for a certificate of insurance certifying that you have not claimed over the past twelve months.

Transfer from a commercial vehicle to a private vehicle

You can transfer the NCD from your company vehicle to your own car. All you need to do is obtain a written NCD transfer agreement from your employer or its approved representative.

Transfer between different vehicle classes

NCD cannot be transferred between vehicles of different classes. For example, if you sell your van and get a motorcycle, your NCD will reset to 0%.

Transfer to another vehicle under your name

NCD is attached to people, not vehicles. If you own multiple vehicles, each will have its own NCD, which you can transfer from one car to another.

Transfer to a vehicle under a different name

Since NCD is attached to people, not vehicles. Even if you sell your car to someone else, you will keep your NCD, and the buyer of your vehicle will not have your NCD.

Transfer NCD as a named driver

If you mostly drive a company car, or are a named driver of another policy, you will not have a no-claims history, and accordingly, you will not have an NCD to transfer.

What is NCD protection?

Some insurers will provide no-claims discount protection (NCD protection) that you can add to your policy (additional charges apply). After purchasing NCD protection, even if you need to claim compensation after an accident, you can still enjoy your original NCD. However, there is a cap on this type of protection, and protection is effective only if the assessed amount of compensation is not over this cap. Plus, NCD protection is not transferable to other insurers.

Should I claim compensation after an accident?

Although you should notify your insurer or intermediary within 24 hours of a traffic accident and fill in an accident report form, it is up to you, as the owner of the vehicle, to decide whether to claim compensation from your insurer.

Some drivers will compare the amount they will need to pay in a private settlement to what they stand to lose if they forfeit their NCD (or part of it), and pick the option leading to a smaller overall loss. If you have a high NCD, a private settlement is the wiser thing to do, as you want to avoid getting a small compensation to cover the repair cost for some minor damage, only to lose out on a nice premium discount.

If there are no casualties in a road accident, and it is only a minor collision, consider settling privately with the other party, and sign a traffic accident settlement agreement .

On the other hand, we do not recommend a private settlement between the two parties if casualties are involved. This is because even if the two parties have signed a traffic accident settlement agreement, the other party could suddenly change his mind later and demand a huge amount of compensation from you.

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