A No Claim Bonus or NCB is a reward given to policyholders for having a claim-free year. The insurers offer NCB if they do not raise any insurance claims during a particular policy year or consecutive policy years. Policyholders with a claim-free record can get from 20% to 50% discount on premiums. However, individuals should keep in mind that this reward does not depend on the make and age of the insured vehicle.
When does the no claim bonus feature gets cancelled?
You get the benefit of NCB only on comprehensive motor insurance policies. You cannot avail of the NCB benefit if you have standalone own-damage insurance or third-party insurance.
You benefit from NCB by getting discounts on premiums. You will get a 20% discount on the renewal premium of your car insurance policy if you have a record of one-claim free year. This scenario only applies if the policyholder does not make any claims in the past years. The rate of discount will increase with each claim-free year by up to 50% after five claim-free years.
How is No Claim Bonus in car insurance calculated?
Know how to calculate the No Claim Bonus. But before that, here’s a quick look at how much percentage of bonus you can accumulate over the years.
Number of years |
Addition of No Claim Bonus percentage |
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% |
Calculating a No Claim Bonus in car insurance policy is a very straightforward procedure. Most insurance providers have a No Claim Bonus calculator on their official websites so you can easily calculate the NCB online. NCB starts after the first renewal of the motor insurance policy. At present, a No Claim Bonus starts at 20% after the first renewal and goes up to 50% after five consecutive claim-free years.
The NCB gets terminated in the following situations:
The policyholder fails to renew an insurance plan within 90 days from the policy expiry date.
The policyholder files an insurance claim during the policy year.