In India, the Motor Vehicles Act of 1988 makes it mandatory for all vehicles, including taxis, to have valid insurance coverage. Taxi owners are responsible for selecting insurance policies that fulfil their needs and provide sufficient coverage for their vehicles.
One of the important aspects that you need to check while selecting taxi insurance is the No Claim Bonus (NCB). NCB is a discount offered by insurance providers for every claim-free year. However, many taxi owners are unsure about the transferability of NCB when they switch insurance providers.
Read on to understand the details of NCB transferability and make informed decisions about your insurance policies.
What is NCB And How Is It Calculated In Taxi Insurance?
Insurance companies offer a bonus known as the ‘No Claim Bonus’ or NCB as an incentive to their customers who haven't made any claims throughout the duration of their policy.
In taxi insurance, NCB is calculated as a percentage of the Own Damage (OD) premium, which covers damages to the insured vehicle due to accidents, theft, fire, etc. The percentage of NCB increases with every claim-free year, up to a maximum of 50%.
For example, if a taxi owner has not made any claims for 2 consecutive years, they may be eligible for a 20% NCB on the Own Damage (OD) premium.
NCB is an important factor that can significantly reduce the insurance premium for taxi owners and drivers, encouraging safe driving practices and incentivizing timely renewals of insurance policies.
Is NCB Transferrable When Switching Taxi Insurance Providers?
The NCB, or No Claim Bonus, offers significant advantages to taxi owners, encouraging safe driving practices and decreasing insurance premiums. However, when taxi owners switch insurance providers, they may wonder whether they can transfer their NCB to the new policy.
The answer is yes, NCB can be transferred when switching taxi insurance providers. However, the process of transferring NCB can vary depending on the insurance provider and policy terms.
How To Transfer NCB When Switching Taxi Insurance Providers?
To transfer NCB when switching taxi insurance providers, taxi owners need to obtain an NCB certificate from their previous insurance provider. The certificate should mention the percentage of NCB earned and the duration of the policy period without any claims. The new insurance provider may ask for the original NCB certificate, so taxi owners should keep it safe.
It's important to note that NCB can only be transferred between policies of the same type and vehicle category. Therefore, taxi owners should check the policy terms and conditions before switching insurance providers to ensure that their NCB can be transferred.
What Happens To NCB If You Don't Renew Your Taxi Insurance Policy On Time?
If taxi owners don't renew their insurance policy on time, their NCB may lapse. This means they will lose the discount offered by the NCB and will have to pay a higher insurance premium when they renew their policy. Additionally, a delay in policy renewal may attract penalties or lead to the policy being cancelled, causing further financial loss.
In conclusion, No Claim Bonus (NCB) is a huge benefit for taxi owners, as it can reduce insurance premiums and incentivize safe driving practices. It's essential to understand the transferability of NCB when switching taxi insurance providers and ensure that the previous policy is renewed on time to avoid losing the NCB discount. Taxi owners should also compare insurance providers and policies to choose the best option that meets their needs. By making informed decisions about their insurance policies, taxi owners can protect their vehicles and businesses while maximizing their savings.