What Is No Claim Bonus (NCB) & How Is It Calculated?

If you already have motor insurance for your car or bike, you’ve probably heard about No Claim Bonus (NCB). But do you really know how it works?

No Claim Bonus (NCB) is a reward given by your insurance company for safe driving. If you don’t make any claim during your policy year, you get a discount on your premium at the time of renewal.

With rising repair costs and increasing premiums, NCB is one of the smartest ways to save money on motor insurance.

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 What Is No Claim Bonus?

NCB is a discount on your motor insurance premium for not making any claims during the policy year.

• Starts from 20%

• Can go up to 50%

• Applies only to the Own Damage premium

• Belongs to the policyholder (not the vehicle)

• Can be transferred to a new vehicle or new insurer

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 How Is NCB Calculated?

The No Claim Bonus starts from the second year of your policy.

If you do not make a claim in the first year, you get a 20% discount at renewal. The discount increases for every consecutive claim-free year, up to 5 years.

NCB Slab Structure:

After 5 continuous claim-free years, you get the maximum 50% discount on your own damage premium.

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 Benefits of NCB

 Renewal Savings

Save up to 50% on your own damage premium.

Transferable

You can transfer your NCB when:

• Buying a new vehicle

• Switching insurance companies

 Encourages Safe Driving

It rewards careful and responsible drivers.

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 When Does NCB Get Cancelled?

Your NCB will reset or be cancelled if:

• You make an Own Damage claim (Third-party claims do not affect NCB).

• You fail to renew your policy within the allowed grace period.

• The policy is not renewed within 90 days of expiry.

• You don’t transfer your NCB while switching insurers or buying a new vehicle.

• You don’t have NCB Protection add-on and file even a small claim.

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 Pro Tip

If you want to protect your hard-earned bonus, consider opting for the NCB Protection add-on. It helps you retain your NCB even after making a limited number of claims.