No Claim Bonus (NCB)
Save on your car insurance premium with a No Claim Bonus (NCB). Get a discount for each year you don’t make a claim on your policy, up to a maximum of 50% off
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What is a No Claim Bonus or NCB?
NCB ranges from 20%-50% depending upon various insurance company. The discount will be reflected on the premium amount. The discount is transferrable if you transfer to some other insurance provider. NCB is a benefit that is offered only with Own Damage cover. It means it will not be applicable to third party cover.
How to calculate No Claim Bonus?
No Claim Bonus is applicable from the second year of the policy period provided if you do not make any claims in it. In this case, in the first year, you will receive upto 10% discount on the premium. In order to understand the working of a no claim bonus calculator.
The No Claim Bonus is applicable from the second year of the policy period. After the first year, when no claim has been raised, your insurance provider offers you with a discount of 20% on the premium amount. This begins on second year, and this can go up to 5 consecutive years. To understand the working of a no claim bonus calculator, refer to the following table,
| Age of Policy | No Claim Bonus Percentage |
| One year | 20% |
| Two Year | 25% |
| Three Years | 35% |
| Four Years | 45% |
| Five Years | 50% |
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What are the benefits of NCB?
- NCB is a reward for being a good and responsible driver.
- It helps you save big on premium. Even a 20% discount which is the basic NCB discount will significantly reduce your premium.
- In the event you are changing your insurer or car, you can easily do so in a simple and hassle-free manner.
When NCB does get terminated?
- If you raise a claim request, then NCB benefit will be scrapped.
- If you do not renew your policy within 90 days of expiration, then the NCB bonus will be invalid.
- NCB only applies when there is no claim and upon policy renewal. In the event of total loss of a car in a accident or theft, these conditions are not met. Therefore, NCB will not be applicable.
How to Protect NCB?
By purchasing an NCB protection cover add-on you can retain your NCB, even when you raise a claim. Suppose you have a car insurance policy where you have not made a claim for 3 years, now you have a accumulated NCB of 35%. In the fourth year, if you make a claim, then for the forthcoming year, you will still entitle a claim of 35% on your premium if you have purchased the NCB protection cover. The cost of NCB protection cover will be 5-10% of your policy premium.
While purchasing a NCB protection cover, one has to compare the rate of different insurers. Choose an insurer that charges a lower rate so that you can save the premium cost as well.
What are the steps to transfer your NCB?
- If the NCB is transferred from old vehicle to new vehicle, then the owner should keep the copy of transfer of ownership and the old registration copy. Then they have to obtain the transfer certificate from the insurance company. If you change the insurance provider, then the new insurance provider lets you keep the NCB bonus.
- The final step is to request the insurance company to issue the NCB after policy step.
Validity of proof of NCB
The Proof of NCB is usually valid for two years. If the policyholder is off road for any reason, then he/she will have to start from the scratch from the next time he opts for a policy.