When it comes time to insure your car, you might see NCB in your policy cover note. But… what exactly is NCB?
What Is No-Claim Bonus(NCB) Protection in Car Insurance?
NCB, or No Claim Bonus, is the reward or discount car insurance offers when we do not make any claims during the policy term. It is a bonus given for not making any claims in an entire year. NCB increases with each claim-free year,
but if we make any claims, the accumulated bonus may be reset or reduced.
Many people get confused between No-Claim Bonus(NCB) and No-Claim Discount(NCD) but let me tell you that both are the same.
NCB – No-claim Bonus
NCD – No-claim Discount
Please do not get confused between NCB and NCD.
Why NCB Is Important
Think of NCB as a thank-you gift for being a careful driver. It comes in handy when renewing insurance, reducing our motor insurance costs and leading to additional savings.
The longer we drive without making a claim, the bigger this discount gets. Over time, we can accumulate it and earn a discount of up to 50%.
So, whenever we see a No-Claim Bonus(NCB) on our insurance, consider it your bonus for safe driving (and the key to paying less for car insurance).
How NCD Rate Is Calculated
NO CLAIM BONUS SLAB –
| Years Without A Claim | NCB |
| 1 Year | 0 |
| 2 Year | 1 Year complete then NCB 20% |
| 3 Year | 25% |
| 4 Year | 35% |
| 5 Year | 45% |
| 6 Year | 50% |
Source: Indian Motor Tariff Act
The eligibility for any NCB is that you should not have a single claim in the last 1 year or 365 days, only then can you get any NCB.
And friends, it is not the case that any or every company can give any amount of NCB as per their wish.
Every company provides 1 or 2 no-claim bonuses in a year. Still, most companies give 2 Claim Bonuses
some companies also give unlimited Claim Bonuses to their customers in a year like HDFC ERGO Insurance Company, etc.
For this, the proper amount has been fixed by the Insurance Regulatory and Development Authority of India (IRDAI). Every company has to follow the same slab from 20% to 50%.
How to Maintain NCB
1. Drive responsibly
2. Avoid Small Claims
3. Opt for add-ons like NCB protection
4. Renew your policy on time
5. Transfer NCB When Switching Cars or Insurers
6. Perform Regular Vehicle Maintenance
7. Be careful with add-ons
How to calculate NCB in car insurance?
1. Know Your NCB Percentage
1 Year Claim-Free: 20%
2 Years Claim-Free: 25%
3 Years Claim-Free: 35%
4 Years Claim-Free: 45%
5+ Years Claim-Free: 50% (Maximum)
2. Find Your Own Damage (OD) Premium
This is the part of your car insurance premium that covers damages to your car (excluding third-party premiums, taxes, and add-ons).
Example: OD Premium = ₹5,000
3. Multiply NCB Percentage with OD Premium
Formula: NCB Discount = OD Premium × NCB Percentage
Example:
Claim-Free for 3 Years → NCB Percentage = 35%
OD Premium = ₹5,000
NCB Discount = ₹5,000 × 35% = ₹1,750
4. Subtract NCB Discount from OD Premium
Net Premium = OD Premium – NCB Discount
Example: ₹5,000 – ₹1,750 = ₹3,250 (Net Premium after NCB).
Result
You save ₹1,750 on your premium due to your NCB!
This method helps you quickly calculate your savings and plan your renewal premium.
How to Check NCB In Car Insurance
Steps to Check Your NCB:
- Review Your Policy Documents:
- Normally, your insurance policy documents usually mention the No-Claim Bonus(NCB) percentage you are entitled to.
- You should look for a section labeled “No Claim Bonus” or “NCB” in the schedule of your policy.
- Access Your Insurer’s Online Portal or Mobile App:
- You can check your NCB status by logging into your account on your insurer’s website
- App and visit the “Policy Details” and “My Account” sections to view your NCB status.
- Contact Your Insurance Provider:
- Contact your insurance company’s customer service via phone and email.
- Provide your policy number and request information about your current NSB status.
- Check Renewal Notices:
- The renewal notice or premium statement often contains details about your No-Claim Bonus(NCB). Please read them carefully.
- Review these documents to see the NCB applicable to your upcoming premium.
- Get NCB Certificate:
- If you are changing insurers or buying a new vehicle, request a No-Claim Bonus(NCB) certificate from your current insurer.
- This certificate acts as proof of your claim-free history and helps transfer the NCB to your new policy.
Additional Tips:
- Timely renewal:
Make sure to renew your policy on time to save your NCB benefits. Renew within 90 days of policy expiry.
- NCB Protection Add-on:
Consider purchasing the No-Claim Bonus(NCB) Protector add-on, which you can claim a certain number of times, without having to look back at your accumulated No-Claim Bonus(NCB).
In which cases can your NCB be terminated?
Case1. If your accident claim is registered then your NCB will be terminated.
If you register any claim of any kind, because this claim is a bonus for not taking a claim, and if we register the claim, then this no-claim bonus will become zero in the next policy.
Case2. If your policy lapses and it has expired for more than 90 days, then your NCB will also end.
Example Suppose I had 25% NCB and it has expired today, if I renew my policy anytime within the next 90 days and if I have not claimed the previous policy then it will increase from 25% to 35% and
If 91 days have passed then my NCB slab will again become zero. Then my No-Claim Bonus(NCB) will start from zero again.
So even if your NCB has expired for more than 90 days, your NCB will be exhausted.
Case3. Ownership Transfer If you have bought an old car and got it registered in your name, then your slab will again start from zero and as the number of claim-free years increases, your NCB (No-Claim Bonus) will keep increasing with time.
For example, I have bought an old car from someone and now I have updated my name in the RC.
And the insurance policy that belonged to the old owner also No-Claim Bonus(NCB) in it and when I get that policy transferred to my name, then I will not get the No-Claim Bonus(NCB) in it. And I will have to earn NCB from the beginning.
How can you get a 50% no-claim bonus on your new car from the very first day?
Suppose I had an old car and I don’t use it or want to sell it out or I don’t use it at all and I have a 50% No Claim Bonus(NCB) in its policy,
So one thing I have to do is I have to give an application to the insurance company that I want an NCB certificate, then that insurance company will issue me a 50% No Claim Bonus Certificate.
When I purchase a new car after one month, two months, or six months, then I have to give that certificate to the dealer or showroom and say that I am already the owner of the 50% certificate.
I have to get it applied to my new car, so the first policy that will be made for the new car is that also you will get the No Claim Bonus from the very first day.
Friends, if you start earning a No-Claim Bonus(NCB) from zero, then it takes 5 years, here you will get it from the first day, and secondly, if you do not claim in the next years, then that 50% will remain with you as it is.
Whenever you get your NCB certificate issued, the validity of that certificate is only for 3 years from the date of issue.
That means you have to use the NCB certificate within 3 years of getting it issued or else it will expire.
What Happens to NCB After Making a Claim?
After a claim, your accumulated NCB generally resets to zero, meaning you lose the discount on your next renewal.
Impact on future premiums Filing a claim means that you will not get the benefit of a No-Claim Bonus(NCB)discount on your next renewal premium.
Conclusion
No Claim Bonus (NCB) is an important reward in car insurance that gives a big discount to policyholders who have not claimed during the policy period.
It encourages safe driving habits and responsible vehicle ownership.
Understanding the No-Claim Bonus(NCB) can help you make big savings over time, especially as the bonus is accrued for each claim-free year.
It’s important to maintain your No-Claim Bonus(NCB), and choosing simple steps such as Safe Driving and NCB Security add-ons can help you.
If you have an issue related to No-Claim Bonus(NCB), promptly contacting your insurer can help resolve issues.
Ultimately, NCB not only reduces your insurance cost but also promotes the culture of careful driving. Check out the latest insurance information and other best insurance information.
