How ‘No Claim Bonus’ works in car insurance

What is a No Claim Bonus or NCB?

No Claim Bonus or NCB is a reward given by an insurance company to an insured for not raising any claim requests during a policy year. If you do not make any claims for a few years consecutively, you can accumulate up to 50% discount on premiums. The NCB is a discount ranging between 20%-50% and is given to the insured while renewing a policy. The NCB discount is offered on the premium amount during renewal.

NCB Calculation for Car Insurance

Table shows the NCB slab on the number of claim-free years:

Claim-free renewals (years)                  Discount on Premium

On first claim-free renewal                        20%
On second claim-free renewal                       25%
On third claim-free renewal                        35%
On fourth claim-free renewal                       45%
On fifth claim-free renewal                        50%

Documents Required to Transfer NCB:

1. Application for NCB transfer.

2. Copy of the car’s insurance policy.

3. Sales agreement.

4. Booking receipt in the case of purchasing a new car.

5. NCB certificate from the insurer.

Benefits of NCB in Car Insurance:

1. Positive rewards : NCB rewards you for being a responsible driver and keeping your car in a proper condition

2. Easily transferable : NCB benefit can be ported to another car in case you change your vehicle

3. Save on car insurance premium : NCB will help you save you at least 20% of your annual car insurance premium.

Cancellation of NCB :

1. When a claim had been made in a policy year, the policyholder will not be eligible for No Claim Bonus in the next annual year

2. When the policy has not been renewed within 90 days from the expiration of the existing policy

NCB will be allowed, if, the policy is renewed within 90 days of the expiry of the previous policy