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% in 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 car 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 |
20% |
After 2 years |
25% |
After 3 years |
35% |
After 4 years |
45% |
After 5 years |
50% |
How to Transfer NCB When You Buy a New Car
Transferring your old car’s NCB 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
Benefits of NCB in Car Insurance
The no-claim bonus helps to reduce premiums and has several advantages, which are listed below:
For every claim-free year, you get certain rewards and discounts which you can avail during the renewal of the policy by paying a lesser premium.
No claim bonus stays with you
There's no need to worry about losing your NCB when changing your car. It stays with you, not your car. Even if you change your car, your NCB scores will be yours. However, you must renew your policy on a regular basis.
If you are not satisfied with your current insurer and want to move to another, you can easily transfer your NCB; however, make sure you have opted for the policy before its expiry date. Also, the transfer is only available for the same type of vehicle.
If you maintain NCB, adhere to the guidelines, and do not file a claim for 5 years continuously, you are eligible for reasonable discounts at the time of renewing your policy.
Why Should We Opt for No Claim Bonus Protection Coverage?
A comprehensive car insurance policy is indeed a necessity, and, if you own a luxury vehicle, it is all the more important. However, the comprehensive car insurance premium is higher with availability of broad coverage. Here comes the NCB to save you from paying higher premium amounts. With NCB, you get a certain discount on your premium, leading to high savings. Hence, you must have no-claim bonus protection.
Things to remember about NCB in India
Below is the list that contains essential information about NCB in India:
You must opt for the NCB add-on before raising the claim. And if you missed renewing your car insurance policy and the grace period (90 days) is also over, you will lose your NCB.
Keep the NCB certificate carefully; it is proof from your insurance provider.
If you do not opt for the NCB add-on and file a claim, the NCB is zeroed out.
Commercial vehicles and no claim bonus
The terms and conditions regarding the NCB differ for a commercial vehicle, hence, it is important that you read the agreement attentively.
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.