A No Claim Bonus (NCB) is a reward that motor insurance companies provide to their car insurance policyholders if they have not filed a claim during a policy year. The reward is given to the policyholder by way of a discount on the premium payable at the time of renewal of the car insurance policy for the next policy year.


NCB Car Insurance – How Does It Work

The prices of most items that we use in our daily lives keep increasing. However, vehicle insurance providers give you an opportunity to reduce the car insurance premium payable when you renew the policy in the subsequent year. You become eligible for a discount on the renewal premium of your car insurance policy if you do not file any claims during the current policy year. This means that you will not be eligible for any discount or bonus if you file a claim towards the damages sustained by your car in an accident in a policy year. Furthermore, you will not be eligible for any NCB if you fail to renew your policy within 90 days from the date of expiration of your car insurance policy.

When it comes to NCB insurance calculation, your insurance provider will give you a 20 percent discount in renewal premium if you do not file any claim during the first policy year. Subsequently, you become eligible for an additional 5 percent NCB in the second consecutive year if you do not file any claims. You become eligible for a discount of 50 percent in the sixth consecutive year if you have not made any claims till then. This is the upper limit, and you are not eligible for any discount on the renewal premium after the sixth consecutive year. This means that you can save on the renewal premiums that you pay if you are a better driver and you take better care of your car.


No Claim Bonus Calculator

Now that you have an idea as to what NCB is in car insurance, let us discuss the reward in a little more detail. As mentioned above, NCB starts at 20 percent and goes up to 50 percent in the sixth consecutive year of renewal of the policy, with an incremental increase every year.

Calculating your NCB eligibility is not very difficult at all. Most insurance companies provide you with access to a calculator on their website. This helps you calculate your NCB amount, which becomes applicable from the second policy year, without any hassles. Based on the applicable NCB percentage, the bonus is calculated as follows:


Claim free years

No claim bonus

After the 1st year

20 percent

After the 2nd year

25 percent

After the 3rd year

35 percent

After the 4th year

45 percent

After the 5th year

50 percent


Benefits of NCB in Car Insurance

  • Offers you positive rewards

The NCB presents you with a means to earn a reward for driving safely and responsibly. The reward is offered as a discount on the renewal premium.

  • NCB is linked to you and not your vehicle

As NCB is linked to you as a person, you are eligible to receive the benefit irrespective of which car you possess. As long as you continue to renew your car policy before the expiry date, you will derive the benefits that the NCB offers.

  • Savings on car insurance premiums

As mentioned earlier, NCB is nothing but a discount on renewal premiums. You can save up to 50 percent of the annual car insurance premium payable by you.

  • Easily transferable

If you choose to change your car or insurer, the process to be followed to transfer your NCB is not only simple but also hassle-free. However, you should ensure that you are changing your insurer before the expiry of your current policy.

Frequently Asked Questions


Q1. Is it advisable to file small claims even if I lose my NCB?

If you are involved in a minor accident, for example, a simple tyre burst, you could refrain from filing a claim and pay for the repairs if possible. If you can avoid making a claim, you can get a significant discount on the insurance renewal premium.

Q2. Can I get the NCB benefit for more than one car under one policy?

The NCB benefit is applicable only to one car. If you have a second car, you will have to insure it separately and build up its NCB by ensuring the eligibility criteria.

Q3. Is NCB applicable in the case of third-party insurance?

The NCB is not applicable in the case of third-party liability policy, which often accounts for approximately 15 to 20 percent of the premium. This means that you will not be eligible for NCB if you have bought only third-party insurance. Furthermore, a third-party claim does not have any impact on the NCB.

Q4. Is NCB an add-on?

No, the NCB is not an add-on. You are eligible for the NCB if you have purchased comprehensive or own-damage car insurance.

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