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No Claim Bonus in Car Insurance

What is NCB in car insurance

NCB or no claim bonus in car insurance is an incentive offered by the insurance company when you don’t make any claim during the policy period. It is sometimes referred to as an NCB discount that lowers your premium every time you renew your insurance after expiry. The no claim bonus varies depending on how many years have gone by without filing a claim. Accordingly, you can bag a no claim bonus ranging between 20% and 50%. In case you already have ^55% to ^65% NCB in your previous policy, you’ll be eligible to earn a higher NCB than this with a claim-free year.

Benefits of no claim bonus in car insurance

Instant help

Lower premiums

If you don’t make any claims during a policy year, you can earn a good discount on your premium. If you do not file a claim during the first year of your policy, you will earn a 20% NCB discount. This number rises with each consecutive claim-free year. You can get a maximum NCB discount of 50% on your policy premium.

Peace of mind

Rewards for policyholders

No claim bonus in car insurance is given to you and not your car. If you are constantly renewing your car policy, the NCB in car insurance remains with you no matter whether you acquire a new car or sell your old one.

Value for money

Easily transferable

When you sell your car and buy a new one, you can easily transfer your NCB to the new car. The entitlement of no claim bonus will be applicable for the new car subject to the provision that the new car on which the entitled NCB is to be applied is of the same class (as per this tariff) as the car on which the NCB has been earned. Moreover, if you want to buy insurance from another insurer, the no claim bonus can be transferred easily from one insurance provider to another.

Eligibility criteria for family health insurance

How is the no claim bonus (NCB) calculated in car insurance?

No claim bonus comes into play after the first year of the policy. It is calculated in the following manner if you renew your policy within 90 days:

  • If you do not file a claim within the first year of your coverage, you will receive a 20% discount on your premium in the form of a no claim bonus in car insurance.

  • With three consecutive years without a claim, the no claim bonus percentage will be 35%.

  • The NCB will be 45% and 50% if the claim is not filed for four and five years, respectively.

  • To calculate the no claim bonus easily, you may use the no claim bonus calculator.

Aspects of no claim bonus (NCB) that you need to be aware of

  • NCB reduces OD premium

    The maximum no claim bonus you can earn is 50%, and that too after going claimless for five years continuously. If you have already received the maximum NCB, even if you go claimless for another year, you won't be eligible for NCB higher than 50%.

  • NCB can be transferred to your new car

    Your NCB belongs to you and not your car. So, when you buy a new car, you can transfer the NCB to it. However, your new car should be of the same class as per tariff as the car on which the NCB has been earned. Also, keep in mind that NCB cannot be transferred to another person unless the car owner dies and the vehicle is handed over to a legal heir. The NCB must be transferred to the legal heir within 90 days.

  • NCB is not computed on the entire premium 

    Are you aware that the no claim bonus does not apply to the premium for third-party insurance? Therefore, the next time when you calculate the NCB percentage, you’ll need to apply it on your own damage premium. 

  • Incorrect NCB declaration is meaningless

    Is the NCB amount you are providing incorrect? If it is then your insurance claim can be rejected for declaring wrong NCB.

When is no claim bonus (NCB) terminated?

  • Have you made a claim during the first year of your policy? If yes, then you won't earn any no claim bonus in the next year. 

  • Have you renewed your insurance policy within 90 days of its expiration date? If you did not, you wouldn’t get the no claim bonus.

How to transfer no claim bonus (NCB) to new car insurance?

Critical illness cover

Inform existing insurer

If you are buying new car insurance, inform your old car insurance provider about it.

Hospital cash cover

Submit documents

Request your old car insurer to transfer your no claim bonus protection by furnishing all the relevant documents.

Donor expense cover

Get the NCB certificate

Once the old insurer is satisfied with the submitted documents, they will issue the NCB protection certificate.

Convalescence benefit cover

Submit the NCB certificate

After receiving the NCB certificate from the old insurer, submit the same to the new insurance company. Your new motor insurance provider will transfer the no claim bonus.

Convalescence benefit cover

Declare your NCB

If you can’t share the NCB certificate, you can give a declaration to your new insurance company stating your NCB rate and that you had a claim-free year under the expiring policy. If this is found to be false, you may lose the benefits under the policy.

Eligibility criteria for family health insurance

How does the no claim bonus (NCB) work in car insurance?

NCB in car insurance works as a reward system. After purchasing your car insurance policy, by going claimless during the first policy year, you start by accumulating a 20% no claim bonus for the next year. The no claim bonus in car insurance keeps on accumulating with each claimless year. After the second year of the policy, you will receive a 25% discount, and if you have not made any claims for the previous five years, you will earn a 50% NCB. It is important to note that NCB is allowed only when the car has been insured continuously for 12 months without any break.

Eligibility criteria for family health insurance

NCB myth busters

  • It is a widespread misconception that you lose no claim bonus protection if you switch your car insurance from one insurer to the other. This is not the case as NCB can be readily transferred from one insurer to another.

  • Just like any car insurance product, people believe that NCB protection cover is for vehicles. This is not true. The NCB lowers your policy premium and remains with you as long as your policy is renewed.

  • Another prevalent myth is that if you replace an old car with a new one you’ll lose your no claim bonus. Fact is, by transferring your NCB to the new car, you can easily retain it. However, it is important that the new car is of the same class as that of the one on which NCB was earned.

How to ensure you don't lose NCB during renewal?

To retain the NCB, renew your policy within 90 days of its expiry. Ensure you’ve made no claim and there was no transfer of ownership. Also, make sure you disclose the accurate NCB. Here is all you have to do for the policy renewal.

  • 1
    Click here to visit our car insurance renewal page.  
  • 2
    Enter your vehicle’s registration number or your registered mobile number.
  • 3
    Click on ‘Proceed’
  • 4
    Follow the instructions to renew your car insurance.

To renew your car insurance, you can also visit the link sent to your registered mobile number and e-mail id.

What documents are required for transferring the no claim bonus (NCB)?

  • Duly filled NCB transfer application form.

  • Sale document of the vehicle.

Tips to protect your NCB

  • Follow road safety rules to avoid any accident.

  • Schedule maintenance of your car regularly so it doesn’t break down or meet with an accident.

FAQs on no claim bonus in car insurance

Can I transfer my NCB from a car to a two-wheeler or motorcycle? 

Can one no claim bonus cover multiple cars?

No, your NCB discount does not cover multiple cars. You would need to purchase individual insurance so you can earn no claim bonus for each of them with every claim-free year.

What is the maximum percentage of NCB available under car insurance?

For car insurance, you can avail of a maximum of 50% NCB. If you have not filed any claim in the last five years, you will be eligible for a 50% no claim bonus. 

Will I lose my NCB if I cancel my policy before expiry?

If you cancel your policy on account of sale of your car and it is not replaced immediately with a new one or your car is laid up, then you can retain your no claim bonus with NCB certificate. This can be used if you purchase a new car until 3 years from the expiry of the previous insurance.

How will a claim impact my NCB?

If you file a claim, you will lose your NCB regardless of how small the claim amount is.

How does NCB impact the overall car insurance premium?

If you do not submit a claim within the first year of your insurance, you will be eligible for a 20% discount on your premium in the form of NCB. Similarly, by going for five consecutive claimless years, you get a 50% no claim bonus. However, don't forget to renew your car insurance policy before it expires. 

What happens to the NCB if the vehicle is in an accident or stolen? 

If you prefer a claim on account of accident or if the vehicle is stolen then you’ll end up losing NCB. However, in the case of an accident, you can protect your NCB by avoiding minor claims.

What happens to the NCB if the insurance is shifted to a different insurer?

You’ll earn the eligible NCB while shifting to another insurer provided you’ve made no claim and not transferred the ownership. In the form of an NCB certificate, you are required to furnish proof of accumulated discounts over the years so that the new insurer can provide no claim bonus discount accordingly.

How long is NCB valid for? 

The no claim bonus is valid for 90 days from the car insurance policy renewal date. If you have sold your car without buying a new one or it is laid up, you are entitled to receive a no claim bonus reserving letter that comes with the validity of three years from the expiry of the previous insurance. 

Do you lose NCB if you cancel insurance?

In case you cancel your car insurance because you have sold your car without replacing it with new one or your car is laid up, you can retain your no claim bonus with the help of NCB certificate. You can use it when you purchase a new car until 3 years from the expiry of the previous insurance.

Can one claim NCB earned abroad on taking an insurance policy in India?

On production of evidence of having earned NCB abroad, one may be granted NCB on a new policy taken out in India as per entitlement earned abroad. However, the policy must be taken out in India within 3 years of expiry of the overseas insurance policy, subject to relevant provisions of NCB under these rules. 

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