NCB in Car Insurance

No Claim Bonus or NCB is a reward that you can avail on your car insurance premium during renewal. However, you can become eligible for NCB in car insurance by making zero claims throughout the policy tenor. The bonus starts at 20% after the first year and keeps increasing for every claim-free year thereafter. But raising even a single claim during the policy term comes with the risk of losing the NCB in insurance.


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What is No Claim Bonus in Car Insurance

No Claim Bonus in car insurance or NCB in terms of car insurance is a benefit given to the policyholder for not making any claims during the insurance tenure. Basically, it is like a pat on the back for following road safety rules throughout the year and keeping your vehicle safe from any damages. This bonus comes in the form of a reward, where you can avail the own damage component of car insurance at a lower price.

How Does NCB Work

With your first claim-free year, you can avail a reward of 20% on your comprehensive car insurance premium which will continue to increase by 5-10% every claim-free year. Moreover, this reward is transferable. The accumulated benefits can be transferred even if you buy a new vehicle or change your insurance provider. 

How is No Claim Bonus Calculated

The NCB in car insurance is applicable on renewing your comprehensive insurance policy after a claim-free year. The bonus starts at 20% and can go up to 50% for consecutive claim-free years. Therefore, you can enjoy a 50% reduction on your car insurance premium for raising zero claims in the policy term. So, learn how to calculate NCB for car insurance with the table below:

No. of Claim-Free Years

NCB Reward

After 1 year


After 2 year


After 3 year


After 4 year


After 5 year



How to Transfer NCB When You Buy a New Car

Transferring your old car’s NBC to the new vehicle is quite simple. All you have to do is follow the below steps:

Step 1: Cancel the old car insurance

Step 2: Upon cancellation, your insurer will send an NCB retention letter

Step 3: Show the NCB retention letter to the new insurer in order to avail the bonus

Documents Required for NCB Transfer

Here’s a list of documents you need to transfer your earned NCB:

  • Original policy copy and certificate of insurance (also called Form 51)

  • Request letter for policy cancellation

  • Proof of delivery of the car to the new owner

  • Form 29 (notice of transfer of ownership of a motor vehicle)

  • Photocopy of the registration certificate book with the name of the new owner

  • Form 30 (application for intimation and transfer of ownership of a motor vehicle)

The four documents mentioned towards the end are needed only if you are selling your old car. Even though you can transfer the NCB without selling your old car, most insurance providers demand ownership transfer. However, here’s a way out: a transfer to the spouse or a family member is valid. Moreover, you can apply for an NCB retention certificate within 90 days from the date of sale. This certificate is valid for 3 years.

Bottom Line

Securing your vehicle with a comprehensive car insurance plan has become essential with an increasing number of accidents being reported every year. Apart from accidental damage, you can also get financial cushioning against perils such as theft, man-made disasters, natural calamities, etc.

So, head over to Bajaj Markets today to choose the best car insurance policy to safeguard your prized possession. Before that, you can also get an estimate of the premium rate with our car insurance premium calculator now!

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FAQs on NCB in Car Insurance

✔️Will I be able to use my NCB in two different cars at the same time?

No, you have to buy individual policies for each car. Both the policies will have separate NCB rewards.

✔️Is there a way I can retain my NCB even after making a claim?

You can retain your NCB reward by purchasing an NCB Protection cover with your insurance policy beforehand. In case you do not have the add-on cover, you shall lose the accumulated bonus.

✔️Is NCB in car insurance applicable to third-party cover as well?

No. No Claim Bonus in car insurance is only applicable to comprehensive insurance policies.

✔️Can I cash out the NCB in car insurance if I don’t want to continue with a comprehensive plan?

No, you cannot cash out the No Claim Bonus in car insurance as it’s a reward available on the insurance renewal premium.

✔️What are the documents required for transferring NCB to a new insurance provider?

Make sure to keep the below-mentioned documents ready to transfer the NCB:

  • NCB transfer application

  • Copy of car insurance

  • Buyer/Seller agreement, Form 29, and 30

✔️Do insurance providers verify the NCB and the car insurance claim history?

Yes. The insurance provider verifies the declared NCB reward and your insurance history. Thus, it is recommended to be honest with your insurer to avoid the cancellation of your policy.