No Claim Bonus in Car Insurance (2024)

Benefits of No Claim Bonus in car insurance

Here are the benefits of No Claim Bonus in a car insurance policy:

Affordablepremiums

NCB makes your policies more affordable. You save 20-50% on your car insurance premiums during the policy renewal if you have a zero-claim record.

Earn rewardsfor maintainingyour car properly

Insurers offer no claim bonus as a reward to the policyholders for driving safely and maintaining the vehicle properly. These factors make valid proof because you make no claims on your car insurance policy. Hence, you earn the reward for having good driving history.

Granteddirectlyto thepolicyholders

Theinsurer grants the No Claim Bonusin a car insurance directly to the policyholder and not the insured vehicle. Hence, if you decide to sell the vehicle, the No Claim Bonus will remain intact. But you cannot transfer the NCB to a new owner.

Transferable to anotherinsureror car

In case you plan to buy a new car, you can transfer the NCB to the new policy. Also, if you decide to switch to another insurer, you can still transfer the NCB.

What is NCB protector in car insurance?

You get NCB protector as an add-on cover on a comprehensive car insurance or standalone owndamage car insurance policy.This add-on cover retains the NCB value even if you have made claims in a policy year.

How is NCB calculated?

No Claim Bonus (NCB) is calculated on the basis of the number of claim-free years of the policyholder. The longer the policyholder goes without making a claim, the higher the percentage of no claim bonus they will receive on their car insurance policy.

NCB in insurance ranges from 20% to 50%, depending on the insurance provider and years of claim-free driving. Insurer applies the NCB percentage to the own damage premium of the policy, resulting in reduced insurance premiums. But you must note that if you make any claims, the no claim bonus percentage will reset to zero. Therefore, it is essential to drive safely and avoid accidents to enjoy the benefits of NCB in car insurance. Keep a track of the number of claim-free years to ascertain your NCB percentage and enjoy discounted premiums while driving safely on the roads.

Number of years	NCB discount
One claim-free year	20%
Consecutive two claim-free years	25%
Consecutive three claim-free years	35%
Consecutive four claim-free years	45%
Consecutive five claim-free years	50%

How to transfer NCB to a new car insurancepolicy?

The process of transferring an NCB to a new car insurance policy is simple. You can transfer the No Claim Bonusin three ways: online, offline or through an agent.

For transferring the No Claim Bonus online, you need to inform the new insurance provider. Provide details like the exact NCB, the former motor insurance company’s name, and the last policy number. The new insurance provider will transfer the No Claim Bonusto the new insurance plan.

Documents required for NCB transfer

Here is a list of documents requiredto transfer NCB in insurance:

Photocopy of car insurance
Copy of car delivery receipt
Transfer application
NCB certificate
Buyer-seller agreement (Form 29 and 30)
Copy of ownership transfer certificate
Copy of booking receipt in case of purchasing a new car

When is NCBin insurance applicable?

NCB (No Claim Bonus) is applicable in insurance when you do not make any claim in a policy year. It is a reward or discount given by the insurance company for not claiming during the policy term.NCB in insurance is usually applicable when renewing a policy and can result in significant savings on premiums.

Important things to know about NCB in insurance

NCB is a discount given by insurers on the subsequent policy premium. Some important things to note about No Claim Bonus are:

The discount starts at 20% and increases up to 50% based on the consecutive claim-free years.
NCB is applicable only to the own damage premium and not on third-party premiums.
Policyholders can transfer their NCB while switching their insurance provider for the same car.
NCB in car insurance is an essential consideration when renewing your policy.

Is NCB applicable to third-party insurance?

No, you do not get the benefit of NCB on third-party insurance. You get the benefit of NCB on a comprehensive car insurance or standalone own-damage insurance policy.

How to transfer No Claim Bonus (NCB) to new car insurance?

If you are looking to transfer your No Claim Bonus (NCB) to a new car insurance policy, then you only need to the following things.

The first step is to acquire the NCB certificate from your existing insurer. Then you need to present the certificate to your new insurer when purchasing a new policy. By doing so, you can enjoy lower premiums on the new policy. Many a times car owners in India forget to transfer their NCB to their new insurance policy, thereby losing out on benefits. Therefore, ensure to make the transfer properly to take advantage of the NCB. Follow these simple steps and enjoy discounted premiums on your new car insurance policy.

What causes the NCB termination?

The NCB gets terminated if any of the following situations arise:

In case a policyholder does not renew the insurance plan within 90 days from its expiry date.
In case the policyholder files an insurance claim during the policy year.

How to check NCB in car insurance?

Refer to the NCB slab provided by the insurer when buying the car insurance policy. You will also find the NCB calculation on the policy document. When you renew your car insurance policy online, you will see the applicable NCB on the webpage. You can also check with your agent or insurance executive to know the NCB earned.

Terms and conditions of NCB transfer

Here are the terms and conditions of an NCB transfer that one needs to keep in mind:

One can transfer the NCB from one vehicle to another, provided the policyholder remains the same.
One can transfer NCB from one insurance provider to another only during the policy renewal.
Policyholders need to submit the NCB certificate online from the current insurer or applyoffline.

Also, check

Zero depreciation cover	Engine protection cover
Roadside assistance cover	Pay as you drive cover

FAQs

Do insurance companies check no claim bonus? ›

Providers can verify your no-claims data by checking the Motor Insurers' Bureau no-claims discount database or contacting your previous provider. But they may ask you to send proof yourself of the number of years you've gone without making a claim on your car insurance.

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Is it worth paying for no claims bonus? ›

Once you have several years of NCD you might want to consider paying for no-claims protection. This is because if you make a claim, you could lose anything you've built up already. Whether NCB protection is worth the extra cost depends on your budget, how much your insurance is, and how big your discount is.

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What makes you lose no claims bonus? ›

If you don't protect your no claims discount and you're forced to make a claim, you'll lose your existing no claims discount. Whether it's lost entirely, or just reduced, depends on: The amount of discount you've built up. The number of claims you make.

How much does car insurance go down after 1 year no claims? ›

If your policy has a no-claims discount, how much car insurance goes down after one year of no claims is usually between 10% and 15%.

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How important is no claim bonus? ›

Each full year you don't make a claim, you'll earn an extra year's no-claims bonus, which can result in some serious discounts. For example, a provider might give you a 30% to 40% discount if you don't claim in your first year, and then offer an additional 10% if you repeat the feat in your second year and beyond.

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How much NCB do you lose after a claim? ›

Even if you do have to claim for an accident that was your fault, you could still keep some of your NCB. If you make one claim during your insurance period, you'll lose two years of the bonus.

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What is average no claims bonus? ›

No claims discounts vary from insurer to insurer, but they can be as much as 30% for one claim-free year and 60% for five claim-free years.

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Will my insurance go up if I have protected no claims? ›

Depending on the insurance company, a single accident could take it all away. Protected no-claims doesn't stop your policy costs rising though. Having an accident still increases your risk profile.

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Can I transfer my no-claims bonus to my son? ›

A no claims bonus is usually only given to the policyholder themselves, so second drivers, also called "named drivers", don't usually earn their own bonus unless they are also the main driver on another policy. Here's a couple of examples.

Do I lose my no claims if I wasn't at fault? ›

Does a non-fault claim affect my no-claims bonus? It might sound unfair, but you can lose your no-claims bonus for an incident even if it wasn't your fault (unless you've got a protected no-claims bonus). After all, it's a “no-claims bonus”, not a “no-blame bonus” – and a claim is a claim, regardless of who's at fault.

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How do I increase my no claim bonus? ›

No claim bonus will increase with each claim-free year. You can accumulate up to 50% after five consecutive claim-free years.

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How many times can you use your no claims bonus? ›

You can only use one NCB at a time. However, you can build up a new NCB for your work vehicle. Check with your insurer for more information specific to your policy.

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Is it better to pay car insurance monthly or every 6 months? ›

Is it cheaper to pay car insurance monthly, or every six months? Some companies do offer a discount by paying for the whole six-month policy in full, but monthly payments are more common, and depending on the company, it may be the same overall price as paying up front.

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Does your insurance go up after a claim that is not your fault? ›

Under California law, an insurer cannot increase your premiums when you aren't at fault.

Which age group pays the most for car insurance? ›

Teenagers. Teenagers tend to pay far more for auto insurance than any other age group, according to The Zebra's State of Insurance 2021 report (which informs all the price ranges in this article). New drivers are simply less skilled and more likely to engage in risky driving behaviors.

Is your no claims bonus affected if someone hits me? ›

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How to check NCB in car insurance? ›

The NCB will be mentioned on the webpage during the online car insurance renewal process. If you renew your car insurance policy with a different insurer, you must mention the NCB earned in your previous policy. You can also view the NCB calculation in your policy document post-policy purchase.

Can I keep my no claims bonus as a named driver? ›

Named driver on someone else's policy

It's usually only the policyholder or main driver who gets a no-claims discount. So if you've been driving someone else's car as a named driver and later take out your own car insurance, you won't reap the rewards of not making any claims on their policy.

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