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🚗 What is NCB (No Claim Bonus) in Car Insurance?
When it comes to car insurance, most people focus on the premium amount, the IDV (Insured Declared Value), and the coverage options. But there’s one hidden benefit that many people either overlook or don’t fully understand — No Claim Bonus (NCB).
If you’re a responsible car owner and haven’t made any claims in your policy year, your insurance company rewards you with a discount. This reward is called No Claim Bonus, or simply NCB.
In this blog, we’ll explain what NCB is, how it works, its benefits, how it is calculated, and how you can protect it to save money on your car insurance renewal.
✅ What is No Claim Bonus (NCB)?
No Claim Bonus (NCB) is a discount given by your insurance company when you do not file any claim during the policy year. It is a reward for driving safely and not making the insurer pay for any damages.
You can think of NCB as a “thank you” gift from your insurer for being careful with your vehicle. This bonus is applied as a discount on your next year’s premium for the own damage portion of your policy.
📌 Note: NCB is available only on the own-damage premium, not on the third-party premium which is fixed by IRDAI.
💡 Why Do Insurance Companies Offer NCB?
The main reason insurers offer an NCB is to encourage safe driving and lower claim frequency. When policyholders avoid minor claims and manage small repairs on their own, insurers save money. They pass on a part of this saving to you as a discount on your renewal premium.
This system benefits both:
- You, for getting a lower premium
- The insurer, for fewer claims and better risk management
📊 NCB Slab – How Much Discount Can You Get?
NCB starts at 20% for the first claim-free year and can go up to 50% if you don’t make a claim for 5 consecutive years.
Here’s the NCB percentage chart:
| Claim-Free Years | NCB Discount on Own Damage Premium |
|---|---|
| After 1 year | 20% |
| After 2 years | 25% |
| After 3 years | 35% |
| After 4 years | 45% |
| After 5 years | 50% |
❗ If you make a claim in any year, your NCB is reset to 0% the next year.
🚘 How Does NCB Work in Car Insurance?
Let’s say your car insurance own-damage premium is ₹10,000.
- Year 1 (No Claim): NCB = 20% → You pay ₹8,000 next year
- Year 2 (No Claim): NCB = 25% → You pay ₹7,500
- Year 3 (No Claim): NCB = 35% → You pay ₹6,500
- and so on until it reaches 50% after 5 claim-free years.
So if you maintain a no-claim record, your premium can become half over time!
🔁 Can NCB Be Transferred to a New Car or New Policy?
Yes! The good news is that NCB belongs to you, not the car.
So, even if you sell your car and buy a new one, you can transfer your NCB to the new policy for the new car.
A No Claim Bonus (NCB) certificate is usually valid for 3 years from the date it is issued. You must use or transfer it within this time, or it will expire.
Likewise, if you change your insurance company, your new insurer will honor your NCB from the previous policy — as long as you provide proof (like an NCB certificate).
🧾 Documents Required to Transfer NCB
To transfer your No Claim Bonus to a new insurer or new car, you usually need:
- Copy of your old policy
- NCB certificate from previous insurer
- Sale deed or RC transfer (if selling old car)
- Application for NCB retention
📝 Some insurers allow NCB transfer online with digital documentation.
🚫 What Happens to NCB if You Make a Claim?
If you raise a claim, your NCB gets reset to 0%, no matter how small the claim amount is.
That means, in the next renewal:
- You will pay the full premium again
- No discount will be available
This is why many people avoid small claims (like a broken mirror or small scratches) and prefer paying for minor repairs out of pocket to retain their NCB.
🛡️ What is NCB Protection Add-on?
To protect your accumulated NCB even if you make a claim, insurers offer an NCB Protection Add-on.
With this add-on:
- You can file one or two minor claims in a year
- Your NCB won’t reset to 0%
It is especially useful if you have built up a high NCB (like 50%) and don’t want to lose the discount due to a small mishap.
✅ Ideal for: Experienced drivers, high-value cars, people with clean driving records
✅ Benefits of No Claim Bonus (NCB)
Here’s why NCB is a valuable benefit in car insurance:
1. Lower Premiums
The biggest advantage is the discount you get on your own-damage premium — up to 50%.
2. Reward for Safe Driving
NCB motivates you to drive safely and maintain your vehicle.
3. Transferable Benefit
You can carry forward your NCB to a new vehicle or a new insurance company.
4. Long-Term Savings
Over 5 years, you can save thousands of rupees in premiums.
🧠 Pro Tips to Retain and Maximize Your NCB
- Avoid Small Claims: If repair cost is less than NCB discount, pay it yourself.
- Use NCB Protector Add-on: Especially when your NCB is 35% or above.
- Don’t Let Policy Lapse: You lose NCB if your policy lapses for more than 90 days.
- Transfer NCB: When buying a new vehicle, don’t forget to transfer your earned bonus.
- Drive Cautiously: Fewer accidents = more savings.
🧾 Is NCB Available in All Types of Car Insurance?
No. NCB is applicable only in comprehensive or standalone own-damage car insurance policies.
It is not available in third-party insurance, since TP premiums are regulated and fixed by IRDAI.
🤝 How PolicyBargains.com Can Help You With NCB?
At PolicyBargains.com, we make it easy for you to:
- Compare policies with or without NCB benefits
- Transfer your NCB to a new car or insurer
- Select the right NCB Protection Add-on
- Renew your policy on time, so you don’t lose your hard-earned bonus
Our experts guide you every step of the way, whether it’s your first car or your fifth!
❓ Frequently Asked Questions (FAQs)
Q1. Can I use NCB from my old policy on a new car?
Yes, you can transfer your NCB to a new car with the help of an NCB certificate.
Q2. What if I forget to renew my policy on time?
If your policy lapses for more than 90 days, your NCB becomes invalid.
Q3. Will one small claim affect my NCB?
Yes, even a small claim will reset your NCB to zero — unless you have an NCB protection cover.
Q4. Can I get NCB on third-party insurance?
No, NCB applies only on the own damage part of comprehensive insurance.
Q5. How can I get proof of NCB from my insurer?
You can request an NCB certificate from your insurance company or download it from your online account.
Q5. How can I get proof of NCB from my insurer?
An NCB certificate is valid for 3 years. You must use or transfer it within this time, or else it will expire.
🏁 Conclusion: Don’t Let Your NCB Go to Waste
No Claim Bonus may seem like a small discount, but over time it helps you save a significant amount on your car insurance. It’s a reward for being a responsible car owner and maintaining a clean claim history.
If you’re planning to switch your insurer or buy a new car, don’t forget to transfer your NCB. And if you have built a high NCB percentage, consider buying an NCB protector add-on — it’s worth the small extra cost.
At PolicyBargains.com, we help you retain, protect, and benefit from your No Claim Bonus in the smartest way possible.
