How does the no claim bonus (NCB) work in case of a second hand car? I am buying one, which has 20 per cent NCB, will it be transferred to me?
Rajeev Aggarwal, Noida
Congratulations on the purchase of a car that you desire. However, when it comes to car insurance, the policy is in the name of the owner and not the car per se. What this means is that the no claim bonus is actually earned by the owner or driver of the car and not the car. It is for this reason that the NCB is not passed on with the sale of the car. So, the owner of the car can retain the policy benefits before the sale is made and be applied to his next car purchase, even if it is a new car. Many smart car owners use this technique to reduce the premium outgo when they upgrade cars, where the premiums could be exorbitant. Imagine someone earning a 50 per cent NCB on a small car before moving the policy to a new mid-sized sedan? The cost saving on premiums is sizeable.
