No Claim Bonus (NCB) in Car Insurance

Shailesh Kumar

3 years ago

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Did you know that your car insurance company gives you a bonus for not claiming and driving well? Every car insurance company provides a “No claim bonus ( NCB )“ at the time of renewal to its policyholders as a reward for not claiming during the term of the policy.

No Claim Bonus (NCB) in Car Insurance

What is a No Claim Bonus in Car Insurance?

NCB is a discount on the premium offered by an insurer at renewal if there is no claim during the term of the policy for all vehicles. Also, if you decide to buy another car, and you have not made a single claim for your existing car, then also you can avail NCB for your new car.

How does NCB in car insurance work?

NCB is a reward as well as motivation to drive well. If you have not made any claim in the first year, then your insurer will give you a 20% NCB discount. Similarly, if in the consecutive year (2^nd year), you have not claimed, the NCB discount will be 25%. You will keep earning rewards for no claim. This will go on till a 50% discount.

How to calculate No Claim Bonus in Insurance?

Insurance companies give access to an NCB calculator on their website. You can visit the website of your insurance company and calculate your NCB for your vehicle.

In India, NCB begins with 20% and can be 50% in maximum:

NCB can be calculated for claim-free years:

After 1st year: 20%

After 2nd year: 25%

After 3rd year: 35%

After 4th year: 45%

After 5th year: 50%

Facts about No Claim Bonus in Insurance

NCB is considered as evidence of a responsible driver.
NCB can be terminated in the following situations:

When a claim is made during a policy year, then NCB will not be allowed in the subsequent year.
If the policyholder fails to renew his policy within 90 days from the date of expiry of the existing policy.

NCB for a vehicle insured can only be transferred to a new one of the same class. We cannot transfer the NCB of a two-wheeler to a new car or vice versa.
NCB can never be transferred to the other party. NCB cannot be transferred to the new owner of the already insured car.
In order to transfer the NCB, an NCB certificate from the existing insurer is essential.
At the time of renewal, NCB can be transferred from one insurance company to another.
The benefit of NCB is only offered with the Own Damage cover. You cannot avail the NCB against a third-party cover.
If in a car accident, the fault of the driver cannot be determined, then expenses will be divided into the two (with the third party), then no claim bonus will be affected.

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