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.
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:
Discounts and rewards
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.
NCB is transferable
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.
More savings
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:
NCB termination rule
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.
NCB Proof
Keep the NCB certificate carefully; it is proof from your insurance provider.
NCB add-on
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.
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FAQs
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✔️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 policies will have separate NCB rewards.
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✔️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.
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✔️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.
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✔️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.
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✔️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
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✔️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.
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✔️Do you lose NCB if you cancel insurance?
Yes, when you cancel your car insurance, your NCB is terminated. However, if you wish to change your insurer, you can get an NCB certificate from your current insurer to shift your current car insurance to another insurer of your choice.
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✔️How long is NCB valid for?
Your NCB continues to accumulate until you make a claim or if you renew your policy without a claim and before expiry.
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✔️Is there a distinct time limit concerning transferring the No Claim Bonus to a legal heir?
This term for this situation is totally up to the insurer, therefore, please connect with the insurer to get an accurate answer.
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✔️Will a third-party claim affect my NCB component?
To be eligible for NCB, you must have comprehensive car insurance or standalone damage.You are not eligible for NCB if you only have third-party liability coverage. Third-party claims do not affect the NCB component.
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✔️How will a claim impact my NCB?
The NCB is terminated when you file any claim related to your car insurance.
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✔️Is NCB calculated on your entire insurance premium amount?
When you do not raise a claim for a year, from the second year onwards, you get a discount of 20–50% on your insurance premium while renewing the policy.
