WHAT IS NCB NO CLAIM BONUS

A No Claim Bonus (NCB) in car insurance is a reward offered by insurers for maintaining a claim-free driving record. With every claim-free year, policyholders receive a discount on their car insurance renewal premium, which can go up to 50% over time.

 NCB not only helps reduce insurance costs but also encourages safe and responsible driving habits. The benefit is transferable when changing insurers or vehicles, making it a valuable feature for long-term car owners. Understanding how NCB works, its eligibility rules, transfer process, and protection cover can help you maximize savings while ensuring comprehensive protection for your vehicle.

What is No Claim Bonus in Car Insurance?

A No Claim Bonus or NCB is a discount offered by the insurance company in car insurance renewal fees for each claim-free year. Accumulation of claim-free years provides you with the opportunity to renew car insurance for a lesser premium. For each additional claim-free year, you will be offered an additional percentage discount on your car insurance renewal premium. The No-Claim Bonus (NCB) in car insurance is calculated based on the number of consecutive claim-free years, with discounts increasing gradually from 20% up to 50% on the renewal premium.

The table given below shows the discounts available to you for each claim-free year:

NCB eligibility status also indicates what kind of driver you are. If you have more claim-free years to your credit, the insurers will view you as a good and experienced driver. This motivates insurers to reward you with certain additional perks. NCB Protection Cover in car insurance is an add-on feature that helps policyholders retain their accumulated No Claim Bonus benefits even after making a claim during the policy period.

No Claim Bonus Benefits in Car Insurance

Discount on Premium

Depending on the number of claim-free years, NCB can provide a 20% to 50% discount on policy renewal.

Transferable

You can transfer your NCB discount on switching your car or car insurance provider.

Enhanced Coverage

With reduced policy renewal pricing with NCB you can afford to buy more add-ons and comprehensive coverage for your vehicle.

Encourage Safe Driving

With the offer of a no-claim bonus, car insurance providers motivate drivers to practice safe driving, which reduces the chances of accidents.

How Does a No-Claim Bonus Work?

The working of the NCB is similar to any other reward program. It motivates car owners to continue to drive safely. In fact, they try their best not to raise car insurance claim settlement for minor damages. This way they don’t lose their eligibility to get the NCB benefit at the time of renewal.

When the policyholder renews his/her car insurance at the end of the first year, he/she becomes eligible for a 20 percent discount in premium. As discussed earlier, the discount is applied only if the policyholder has not filed a car insurance claim during the first policy year. 

Subsequently, the car owner gains an additional 5 percent from the second no-claim year onwards. This way the discount can go up to 50 percent in the sixth consecutive no-claim year.

Terms and Conditions for NCB in Insurance

• You will not be eligible to avail No Claim Bonus if you have already claimed car insurance in the previous year.
• If you failed to renew car insurance policy within 90 days from the expiry date you will not be eligible for No Claim Bonus
• The NCB is not offered to third party car insurance holders and only offered with own damage car insurance or Comprehensive car insurance policy.
• The add-on covers are eligible for any NCB benefit
• If you bought NCB Protect Cover add-on with car insurance, you can retain NCB eligibility even if you file an insurance claim during a policy year.
• NCB can only be transferred within the same person’s name
• In the event of an accident or car theft, the applicability of the No Claim Bonus (NCB) depends on recovery of the expenses from the responsible party and determination of the fault.

How to transfer No Claim Bonus

NCB is transferable and can be transferred while switching cars or insurance providers. Following the steps below can help you to transfer your existing car insurance No Claim Bonus.

Step 1: Obtain NCB Certificate

Request an NCB certificate or a statement proving your claim-free history to your car insurance provider. This certificate serves as proof of your NCB entitlement.

Step 2: Purchase a New Car or Policy

When buying a new car or switching car insurance providers, inform the insurer about your existing NCB and provide the NCB certificate to transfer the bonus.

Step 3: Submit Required Documents

Submit the necessary documents, including the NCB certificate, proof of sale of your old car, and identity details, to the new insurer.

Step 4: NCB Transfer to New Policy

The new insurance provider will apply the No Claim Bonus discount to your new car insurance policy, reducing your premium for the own-damage portion of the coverage.

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Documents Required for NCB Transfer

should keep the following documents ready for smooth transfer of NCB from one insurance provider to another or from one car to another.

• NCB Certificate
• Copy of Car Insurance
• Document Proving Car Ownership
• Transfer application
• Buyer-seller agreement (Form 29 & 30)
• Ownership transfer certificate

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FAQs 

1. Under what conditions is the NCB benefit cancelled?

The No Claim Bonus (NCB) benefit is cancelled if you make a claim during the policy period or do not renew your car insurance policy within 90 days after its expiry.

2. Will I lose my NCB if I switch to another insurance company?

No, the NCB benefit is transferable. You can continue enjoying the accumulated NCB even after changing your car insurance provider.

3. Is it possible to use the same NCB for more than one car?

No, an NCB can only be used for a single car insurance policy. However, you may transfer the NCB from one car policy to another owned by you.

4. How can I keep my NCB benefit after selling my car?

To retain your NCB benefit after selling your car, you must obtain an NCB retention certificate from your insurer and submit it along with Form 29 and the sale documents to the respective RTO for ownership transfer.

5. How is NCB different from NCB Protection Cover?

NCB is a discount offered on your car insurance renewal premium for maintaining a claim-free record. On the other hand, NCB Protection Cover is an add-on cover that helps preserve your NCB benefits even if you raise a claim during the policy period.

Updated on - 27/06/2026