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No Claim Bonus (NCB) in Car Insurance and How it is Calculated?

What is NCB in Car Insurance?

ncb in car insurance

What is NCB in Car Insurance?

NCB stands for ‘No Claim Bonus’. It’s actually a kind of reward that the car insurance providers provide to their customers when they do not file any claim in a policy year. In this reward, the insured person gets a discount on their premium when they renew their insurance in the next policy year.

NCB Full Form in Car Insurance

The NCB full form in car insurance is “No Claim Bonus”. As the name suggests, it is a bonus you receive for not filing any claim. 

NCB Meaning in Car Insurance

You drive safely for a year and make no claims during the policy period. Your policy period is about to end and it is time for insurance renewal. Your insurer acknowledges the fact that you are a safe driver and wants to reward you for not raising a claim. Thus, the insurer offers you a discount while renewing your policy. This reward is termed as a bike and car insurance No Claim Bonus.

Why Customers Trust Digit Car Insurance?

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8 Lacs+

Claims Settled

3000 Crore+

Paid-in Claims

75 Lacs+

Cars Insured

1.2 Crore+

Policies Sold

96%

Claim Settlement Ratio (FY'25)

9000+

Cashless Garages

Disclaimer: 8 Lacs+ claims settled for private car policies since inception till 31st December-2024. 3000 Crore+ paid in claims for private car policies since inception till 31st December-2024. 1.2 Crore+ Policies Sold for private car policies sold since inception till 31st December-2024. 96% claims settled for Overall Motor line of business of Digit. CSR Is calculated for FY 24-25. CSR Ratio is count of (Claims paid + Claims Closed) / (Claims O/S at Start + Claims Reported - Claims O/S at End). 9000+ cashless garage network as of 31st December 2024.

How NCB in Car Insurance Works?

how ncb in car insurance works

How NCB in Car Insurance Works?

While everything else around you rise in price, your car insurance gives you a special benefit by giving you the choice to reduce your car insurance premium. 

It works almost like a rewards system. You start by gaining a 20% NCB discount if you haven’t made any claims for your first policy year. Consequently, you keep gaining an additional 5% from your second consecutive year of making no claims.  

This can go about a reduction of 50% in your sixth consecutive year. Long story short, the better driver you are, the better you protect your car - the better it works out for you in the long run.

How is NCB Calculated in Car Insurance?

how-is-ncb-calculated-in-car-insurance

How is NCB Calculated in Car Insurance?

After understanding what an NCB policy is in insurance terms, the next big question is – how much the no claim bonus for car insurance is.

Using a No Claim Bonus calculator is not that difficult. In fact, many insurance companies give you access to a No Claim Bonus Calculator on their websites that will help you calculate your No Claim Bonus amount accordingly. The same usually starts from the second year of your respective policy.

According to the present norm, NCB in India starts with 20% and goes up to 50% in the sixth year. No Claim Bonus percentage for any four-wheeler is generally calculated in the following way.

NCB Calculation for Car Insurance

Claim Free Years No Claim Bonus
After 1 year 20%
After 2 years 25%
After 3 years 35%
After 4 years 45%
After 5 years 50%

Let us understand with an example:

On the first renewal, the policyholder is entitled to a 20% discount if he has not made a claim. In the second renewal, he will receive a 25% discount if he has not made a claim. 

Therefore, his premium would be lesser every year, and he would have saved his money, if he had not made a claim during his policy tenure.

Thus, the money saved on the Own Damage premium increases annually as the discount increases annually, to a maximum of 50%, till there are zero claims.  

Digit’s Motor Insurance Claim Settlement Ratio is 96% for FY’25

Digit’s Motor Insurance Claim Settlement Ratio is 96% for FY’25

When it came to motor insurance specifically, Digit showcased a high-efficiency Claims Settlement Ratio (CSR), with 96% of motor claims settled seamlessly and we make this simple with:

  • Smartphone-enabled self-inspection process, with which you can file your claim in minutes!

  • Cashless Claims at over 9000 garages in India, so you can get your two-wheeler fixed without stress. 

  • Everything digital and paperless. No need for hard copies—just upload everything on our app, and you're all set!

What Our Customers Have to Say about Us

4.7/5

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(250K + Customer Ratings)

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quote 6 Dec 2024
a great pleasure to be affiliated with you , Had met an accident and got the damaged parts replaced within a day after raising the claim . Thank You
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Shaaz Suhail Salafi

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quote 13 Dec 2024
Very good service. Within two minutes I have renewed my car insurance online.
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Ajay Bharade

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quote 13 Dec 2024
Dear For todays world If any One wants to open a fresh Vehicle Insurance Policy which has all the transparency users frndly Plus the staff is very cooperative hats off. Wishing God bless for all yr future Endeavor 's. Sr Citizen-Policy-Investor
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DinShaw Sahukar

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quote 20 Dec 2024
Quick reaction on Road side assistance and continuous follow up till resolution. Happy with assistance in late night hours.
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Abhishek Sharma

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quote 13 Aug 2024
I had issue with the motor insurance policy and wanted to upgrade it. The customer care executive had enough patients to explain me everything point to point. Thanks a lot Sudip.
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Pratheesh R

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When is a No Claim Bonus in Car Insurance Applied?

when is a no claim bonus in car insurance applied

When is a No Claim Bonus in Car Insurance Applied?

NCB (No Claim Bonus) is a discount applied to your existing car insurance premium. NCB is typically applied when doing your car insurance policy renewal. It can be applied with the Comprehensive policy and Own Damage plan, but not the Third-party policy.

Is It a Good Idea to Make Small Claims and Lose No Claim Bonus?

mobile phone claim approved

Is It a Good Idea to Make Small Claims and Lose No Claim Bonus?

No! In case you’ve got into a minor accident or are planning to use your car insurance for a small tyre burst, you could instead skip the claim and pay for its repairs yourself (only if you think it’s feasible!) and you can go a year without any claims and therefore gain a No Claims Bonus during your car insurance renewal

How is AI making Digit’s Motor Insurance Claim Process Faster & Smarter

claims phone screen

How is AI making Digit’s Motor Insurance Claim Process Faster & Smarter

At Digit, we believe filing a motor insurance claim should be simple, not stressful. That’s why we’ve built intelligent automation into every step of the process—so you can get back on the road, faster.

  • AI That Sees What You See: When you upload a video of the damage through our app, our AI doesn’t just watch—it analyses. Using advanced image recognition, it assesses the extent of the damage, classifies it, and helps determine the next steps. This means quicker evaluations, fewer delays, and a smoother experience for you.
  • Automated Document Processing: From inspection reports to claim forms, our AI systems automatically sort and process your documents. This reduces manual effort, minimises errors, and speeds up approvals. And with a human-in-the-loop approach, we ensure every claim is handled with both precision and empathy.
  • Automation That Works Behind the Scenes: Our systems also fetch claim details directly from partner platforms, eliminating the need for repetitive data entry. Whether it’s Bulk Policy Issuance or real-time claim registration, automation helps us move faster—so you don’t have to wait.

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67% Car Repair Work Approvals Done within 12 Hours

67% Car Repair Work Approvals Done within 12 Hours

In H2 FY25, our average car repair approval time was 14 hours and 46 minutes, with 67% of approvals completed within 12 hours. Only a few cases experienced longer wait times, typically due to complex assessments or the need for additional documentation, highlighting our commitment to minimising delays and maximising efficiency.

Rest assured, we carefully monitor every step to ensure your car is back on the road as swiftly as possible!

Digit Settled 9.16 Lakh Claims with 99.9950% Accuracy in FY'25

The below data is for all the products as given in the table below.

Settled 9.16 Lakh Claims Settled

Settled 9.16 Lakh Claims Settled

That’s how many times we showed up for our customers in FY 2024–25. Behind each of those numbers is a mishap, and we were right there, making sure things got sorted quickly. 

Out of these, nearly ₹6.52 lakh were motor insurance claims alone—proof that we’re there when it matters most, whether it’s something trivial or serious. 

₹4,622 Crore Paid in Claims

₹4,622 Crore Paid in Claims

From minor hiccups to major emergencies, we made sure our customers didn’t have to carry the financial burden alone. Quick settlements, zero confusion, and real peace of mind. 

Of this, ₹2,199 crore was paid out under motor insurance, covering everything from accidents to unexpected situations like rat damage.

99.9950% Claims Accuracy

99.9950% Claims Accuracy

Out of 9.16 lakh claims in FY 2024–25, only 256 were escalated to the Hon’ble Ombudsman^. Out of which only 46# were escalated and ruled in favour of the customer. This significantly proves the claim's accuracy rate of 99.9950%.

For Motor Claims, out of 256 escalated claims for Digit, just 124 were motor-related. By year-end, 104 motor claims were closed, with 28 resolved through mediation. Only 26 health claim decisions went in favour of customers.

Ombudsman Complaints for FY 2024-25

The below information is a summary of escalated claim cases reviewed by the Hon’ble Ombudsman in FY 2024–25. 

LOB Total Claims Paid (in number) Total Claims Amounts Settled Total Complaints that went to Ombudsman Total Complaints where final decision was given Total Complaints Settled via Mediation Total Decisions in favour of Customer
Health (including PA, travel) 2,18,082 ₹1,374.64 Crore 110 86 21 18
Motor(OD + TP, Including theft, PA) 6,51,954 ₹2,199.58 Crore 124 104 28 26
Other LOBs (miscellaneous) 45,642 ₹1,047.34 Crore 22 17 3 3
Grand Total 9,15,678 ₹4,621.56 Crore 256 207 52 47

Disclaimer: ^This data pertains to cases reported to various offices of the Hon’ble Insurance Ombudsman. Customers have the option to approach the Consumer forum as well; #Only includes complaints arising from claims. The company had a total of 11 complaints arising from non-claims, i.e., policy-related grievances (5 won, 2 settled, 1 lost, and 3 outstanding). One non-claim complaint where the decision went in favour of the complainant is not included in the numerator while calculating claims accuracy.

Interesting Claim Stories & Insights from Digit Customers

car od tr

A Digit Car Insurance customer received a total loss claim of ₹48.70 Lakh in Mumbai

In a recent case from Mumbai, one of our policyholders experienced a total loss after their private car sustained severe damage. Fortunately, the vehicle was insured, and we processed a claim payout of ₹48.70 lakh. This case highlights the importance of having dependable insurance coverage to stay prepared for life’s unexpected turns.
car tp tr

Digit Settled a third party claim worth ₹ 1.5 crores in Raipur, Chhattisgarh

In a recent case from Raipur, a private car was involved in an accident that tragically resulted in a fatality. While such incidents are deeply distressing, they also bring significant financial and legal responsibilities. Fortunately, the vehicle was covered under our third-party insurance policy, which enabled a compensation payout of ₹1.5 crore to the affected party.

This case highlights the critical importance of third-party liability coverage in motor insurance, offering essential financial protection during life’s most difficult moments.

Flood Damage Claims Cross ₹95 Crore, with ₹3 Crore Settled in Azitnagar

When we think of car insurance, we often imagine accidents or theft. But sometimes, the most significant threats come from nature itself. Azitnagar in the Krishna district, had 529 flood-related claims filed this year, with payouts exceeding ₹3 crore. Across the country, we paid out more than ₹95 crore in flood and inundation claims.
unlucky customer

Seven Accident Claims in One Year on One Car, All Approved

One customer in Patna had a year they won’t forget. Their brand-new Kia Carens was involved in not one, not two, but seven accidents. Six happened while driving, and one happened while the car was parked. It was an actual test of their insurance policy and it passed. Every claim was covered, proving that dependable coverage can make all the difference when things go wrong again and again.

Premium Protection For Premium Vehicles

This year, we received some standout premium payments across different vehicle types. A Ferrari topped the list in the four-wheeler category with a premium of ₹8.04 lakh. In the two-wheeler segment, a Hayabusa was insured with a premium of ₹44,000. And in the commercial vehicle category, a Volvo L150 wheel loader was covered with a premium of ₹3.53 lakh. This highlights how our insurance scales to match the value and purpose of every vehicle, whether it’s built for speed or style
bond number plate

Over 670+ Vehicles Insured with ‘007’ Registration

This year, over 670 vehicles insured with us proudly carried the iconic Bond number “007”. Among them, one standout customer paid a premium of ₹5 lakh. This highlights how our insurance supports unique preferences while ensuring complete coverage.

Benefits of NCB in Car Insurance

benefits of ncb in car insurance

Benefits of NCB in Car Insurance

Gives You Positive Rewards: The NCB is nothing, but a means to reward you for being a good and responsible driver and car owner.

Connected to You and Not Your Car: NCB is connected to you as an individual and not your car. This means, no matter which car you have- as long as you have been renewing your car policies before its expiry date, you can continue to benefit from a NO Claim Bonus for your car insurance.

Save on Car Insurance Premium: The benefit everyone loves! Discounts! A No Claim Bonus will save you at least 20% of your annual car insurance premium.

Easily Transferable: In situations where you’re either changing your insurer or car, the process to transfer of your NCB is simple and hassle-free. The only thing you need to ensure is, to shift your policy before your current one already expires.

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How to Retain NCB Even After Filing a Claim?

claims form approved

How to Retain NCB Even After Filing a Claim?

Yes, there is a way to retain your NCB even after you have filed for a claim in a policy year – by opting for NCB Protection Add-on. This add-on is an optional cover that ensures your bonus doesn’t reset if you file a necessary claim. 

Please note that since this is an optional cover, you can buy it only with a comprehensive car insurance policy or a standalone own-damage cover by paying an additional premium. Also, not every insurance company offers this benefit, so confirm with your insurer beforehand.

NCB Protection Cover Exclusions

ncb protection cover exclusions

NCB Protection Cover Exclusions

Following are the cases where this add-on will not be applicable:

  • When you have exceeded the number of claims allowed under the NCB Protection add-on.
  • When any fraudulent OD claims have been made or there is any discrepancy in the facts regarding a claim. 
  • The NCB will drop to 0% if you haven’t renewed the car insurance policy within 90 days of the expiry or stipulated date.
  • If you try to include or remove the NCB Protection cover mid-term.
  • Your car must be repaired in the insurance company’s network garage.

Important Things to Know about No Claim Bonus in Car Insurance

Important Things to Know about No Claim Bonus in Car Insurance

When is NCB Cancelled?

It is seen that NCB is very beneficial. As long as you do not claim, you will continue to get the benefit of NCB protection.

But if you have to claim for any reason during a policy year then you will not get the benefit of NCB in the next policy year.

It is important to know that if you do not renew your existing insurance policy within 90 days from the date of expiry then your NCB will be terminated, and you will not get the benefit of No Claims Bonus anymore. Hence you should always renew your policy timely.

Is NCB Applicable to Third Party Insurance?

No! Policyholders can avail of the benefit of No Claim Bonus only with the Comprehensive policy or Own Damage cover. It means you will NOT get any NCB discount against your car insurance if you own only a third-party cover.

However, making a third-party claim won’t impact your accrued NCB at the time of renewing your policy.

How to get NCB Certificate Online?

At the time of buying an insurance policy, the policyholder is provided with an NCB certificate, and it now depends on the policyholder whether he makes any claims or not in the policy year. If he claims, then he will not be entitled to the NCB benefit for the next year but if he doesn't claim for the entire year, he will be eligible for the NCB benefit.

To get a No Claim Bonus (NCB) certificate, the policyholder can contact the insurance provider and request one. For that he needs to provide your policy number and personal and vehicle details. After verifying the details, the insurer will issue the NCB certificate.

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What to Do with the NCB on Your Existing Policy When Selling the Car?

ncb on your existing policy when selling the car

What to Do with the NCB on Your Existing Policy When Selling the Car?

If you have NCB on your existing policy and decide to sell your car in the middle of the year or, in another case, buy another car, there are two cases you need to know:

  1. If you buy an old car from a dealer or any third-party and if you are eligible for NCB, then you can apply for a no claim bonus transfer. In this case, all that you have to do is write to your insurance provider informing them about the sale of your old car and request them to transfer your NCB to the new car.  
  2. In case you’re now buying a new car insurance policy with Digit, all you have to do is mention your current NCB and the name and policy number of your previous insurer (if you’re buying a new car policy with us for the first time) and we’ll take care of the rest.

How to Claim Your No Claim Bonus for a New Vehicle Insurance Policy?

claims form approved

How to Claim Your No Claim Bonus for a New Vehicle Insurance Policy?

This depends on whether you’re buying your new car insurance online or through an agent, or offline.  

In case you are buying your new car insurance policy offline or via an agent, you will need to transfer your No Claim Bonus by submitting your buyer-seller agreement- Forms 29 and 30 along with a letter requesting the transfer of your NCB from your existing insurance company.

The respective insurer will then issue an NCB certificate which you’ll need to submit to your new car insurance company.  

However, if you’re going to buy your new car insurance online, you don’t need to do any of this. All you need to do is declare the right NCB and old policy number and name of the insurer and your new insurance company will manage the rest of the process.

What are the Documents Required for NCB Transfer?

You have to provide the following documents along with the application: After the submission of the below documents, no claim bonus will be transferred to the new car. Based on the existing NCB certificate the customer can avail the benefit of the discount on the insurance premium for the new car.

Acknowledgement letter your sold car

Insurance policy of the old car

Booking form of the car

Transfer application

Buyer-seller agreement (Forms 29 & 30)

Copy of old RC

NCB certificate from the insurer

What Happens to NCB if the Vehicle is in an Accident or Stolen?

sedan damaged

What Happens to NCB if the Vehicle is in an Accident or Stolen?

If your car gets in an accident or gets stolen, your NCB discount is completely or partially lost if your insurer has to pay out – even if it's not your fault. 

Whether it’s a case of accident or theft, your NCB will be reset to zero unless most damage expenses are recovered. For example, if you were hit by a third-party and they agree it was their fault, your insurer can recover all the costs from them, thus saving your NCB.

FAQs about No Claim Bonus in Car Insurance