As we all know, car insurance is mandatory in India. With an insurance policy, the holder has to only pay a premium amount and in case of any unfortunate incident, the insurance provider shall bear all the expenses pertaining to it. Car insurance not only helps financially at time of need, but also provides relevant protection to your vehicle from time to time.

Along with security under your car insurance you also get compensation in the form of NCB where policyholders are rewarded for not making a claim in the preceding years. No-claim-bonus is like an added advantage to policy holders for bearing small expenses in return for a good bonus claim.

What is NCB and How Does it Work?

With car insurance not only do you get protection but you also get rewarded for being a responsible car owner. In case there is no claim on your insurance policy, you get rewarded with a No claim bonus or NCB by the insurance company, simply for taking good care of your car. NCB rewards range from 20 to 50 percent until your next insurance renewal for your car.

For instance, say you are paying an insurance premium of twenty thousand rupees for your car insurance of which eighteen thousand is the own damage component and you do not make any insurance claim for five consecutive years, you become eligible for a discount up to fifty percent or a calculation of nine thousand rupees.

The key benefits of No claim bonus/ NCB include;

  • Reward for maintaining your car
  • NCB is linked to your policy and not the vehicle
  • NCB creates great savings on the premium
  • NCB is easily transferable

Filing Wrong No-Claim-Bonus/ NCB

In case you file the wrong NCB to save on premium amounts or for a higher percentage during renewal, the NCB and even the policy can get cancelled. Any fraudulent claims or any misrepresentation of facts regarding a claim gets easily caught by the insurance company. As they have a very thorough verification process. Filing the wrong NCB also makes it invalid, in case the vehicle is transferred to the other individual.

Even if you have no malicious intentions and your NCB gets wrongly filed due to a mistake or mindlessness from your end, the consequences of such an error can be critical. In case of a faulty declaration of your NCB, your insurance provider can reject your car insurance claim all in all. That means that if you state the wrong NCB while getting an insurance policy on your car, it is as good as having no cover and protection at all. 

Remember, if you are switching your car insurance policy, ensure that you declare if you have made a claim with your previous insurance company in that year. Such data is easily sourced by the insurance provided and while you may get the policy at times, you will definitely face a problem when there is an unfortunate incident and it is time to make a claim from your end. So, there is no point in hiding it.


Always keep in mind, do not declare a wrong NCB in lieu of decreasing the premium amount or even in case of any genuine miss-out. Make sure to recheck every data you submit to the insurance company regarding your policy including claims, NCB calculation, renewal and transfer.

In case you have stated a higher NCB by mistake while buying or renewing your car insurance policy, then you should approach your insurance company and get the error rectified yourself. Your insurance company might ask you to make the payment for the NCB recovery amount. However, your insurance company shall then endorse your car insurance policy with the correct NCB as it should be.

Read More | Two wheeler insurance facts about motor insurance and drunk driving

FAQs - Frequently Asked Questions

Let’s take a look at some queries on What Will Happen If Declared NCB % Is Found to Be Wrong;

Q1. What happens in case the wrong NCB is filed?

In case you declare a wrong NCB on your insurance policy or at the time of renewal, your NCB claim gets rejected and your insurance policy can be declared void as well. It will be like having no insurance for your car any more. Also, the insurer verifies the NCB before approving it and if it is found to be faulty, you will be asked to pay the difference between the actual NCB and the claimed NCB.

Q2. When does the NCB feature get cancelled?

The NCB can get cancelled if you make an insurance claim within a policy period and also when you fail to renew your policy within the period of ninety days from the expiry of your insurance policy.

Q3. Does changing your insurance provider affect your NCB?

No, changing your insurance provider does not affect your NCB at all. This is because your NCB is easily transferable from one insurance company to another.

Q4. Do I have to be the main driver of the car to get NCB under your insurance policy?

A no claims bonus or NCB is usually only given to the policyholder themselves, so second drivers or the named drivers’ usually do not earn their own bonus except they are also the main driver on another car insurance policy.

Q5. Can I earn NCB under learner license?

Yes, it is possible to earn a No claim bonus or NCB while driving on a provisional or learner licence. This does vary across insurance providers, but no claims are especially significant for young and new drivers.

Q6. How much can I claim for No claim bonus or NCB?

The maximum NCB applicable on any car insurance is up to 50%. In the first consecutive year of no claims, the NCB starts at 20% and eventually goes up to 50% in case of no claims in five consecutive years.

Q7. Can I use NCB for two cars at the same time?

Unfortunately, you can only use one set of NCB discounts on one car at any time. To earn multiple sets of NCB discounts you need to insure multiple cars at the same time.

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