Car Insurance with NCB Discount

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No Claim Bonus (NCB) in Car Insurance

In India, the number of four-wheelers is increasing at a rapid rate. But before you buy a car in India, you must know that motor vehicle insurance is compulsory in India and you have to avail it while buying a car. But the good news is, that most insurance providers provide policyholders with NCB benefits. Now, most people in India are unaware of what NCB even means in the first place! That's why, we're here to answer a commonly asked question, What is NCB in Car Insurance?

NCB actually stands for ‘No Claim Bonus’. It is 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.

For example, you have purchased a car on 21st April-2019 and have purchased the insurance policy for one year at the time of buying the car. That means the car is insured up to 20th April-2020. So if you have not claimed any amount during this one year then you will get a discount on the premium when you will go for renewing the insurance in the year 2020. This is what no claim bonus in car insurance is.

How is NCB Calculated?

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

Calculating your car's No Claim Bonus calculation 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 percent and goes up to 50 percent 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


After 2 years


After 3 years


After 4 years


After 5 years


When is NCB Terminated?

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.

How to get NCB Certificate?

The next question that arises about NCB is how to get NCB certificate? 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 in case he doesn't claim for the entire year, he will be eligible for the NCB benefit.

NCB on Previous Policy

Wonder what happens if you haven’t made any claims yet and decide to sell your car in the middle of the year or, in another case buy another car.

If you buy an old car from a dealer or any third party and if the car is eligible for NCB then you will be able to apply for no claim bonus transfer. In this case, all that you have to do is to write to the insurance provider informing them about the sale of the old car and request then for NCB transfer to the new car. You have to give the details of the existing insurance policy along to the policy service provider with the details of the person to who you want to transfer policy.

Documents required for NCB Transfer

As far as the document is concerned you have to give the following documents along with the application:

  • Copy of delivery note that you’ve received for the sale of the old car
  • Copy of insurance policy of the old car
  • Copy of the booking form that you received for purchasing the car

After the submission of the above 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.

FAQs about No Claim Bonus for Car Insurance