Can the no-claim benefits on my old vehicle be transferred to a new car I plan to buy? Will my insurer consider my track record? I have been driving my current vehicle for five years now and it is still in good condition.
Yes, the no-claim benefits can be transferred to the new vehicle.
Scenario I: If you’ve bought a new vehicle and wish to transfer the no-claim benefits to the new car after having sold the old one, then you can avail the no-claim bonus discount.
Scenario II: If you retain the existing vehicle and purchase a new vehicle, then you should state your intention to transfer the no-claim bonus from the old vehicle to the new one, and the bonus allowed on the unexpired period of insurance of the old vehicle will be collected back from you in cash or cheque, as per the ‘Indian Motor Tariff’.
Simultaneously, the same no-claim benefits percentage will be allowed on the new vehicle.
The track record of the owner of the vehicle will certainly be considered and it will be in the form of reduction in premium for that vehicle.
How do insurance companies assess the value of damage to a vehicle while settling an accident claim?
It is the insurer’s surveyor who assesses the damage to the vehicle. He would check for the extent of damage, relevance of the damage to the accident, whether insured or not, whether the parts damaged can be repaired or need replacement (if they are beyond repair).
If the repairs can be undertaken, the surveyor would arrive at a reasonable estimate for carrying out the repairs and paintwork wherever necessary.
If the parts need replacement, he would allow for the same. For replacement of parts, depreciation will apply depending on the age of the vehicle and the materials that go into the manufacture of the parts.
For example a glass item would not attract any depreciation whereas a plastic item would attract 50% depreciation straight away. For metal parts, a slab of depreciation depending on the age of the component will apply. The depreciation part will be borne by the customer.
Similarly all vehicles are subject to compulsory excess, which is borne by the customer.
Compulsory excess is a mandatory amount that will be deducted from the claim amount each time the claim is made. The rates are Rs500 for vehicles less than 1500cc and Rs1,000 for those exceeding 1500cc.
The insurance company makes final settlement of the claim as per the terms and conditions of the policy.
Readers are welcome to write in with their life and general insurance queries to firstname.lastname@example.org. The questions will be answered by senior executives from leading insurance firms.
Ajay Bimbhet is managing director, Royal Sundaram Alliance Insurance Company Ltd