How is No Claim Bonus calculated during car insurance renewal?

How is No Claim Bonus calculated during car insurance renewal?

Understand how insurance providers calculate the No Claim Bonus during policy renewal.

3 Mins
01 Feb 2023

A No Claim Bonus or NCB is a reward that policyholders get from the insurance provider if they don’t raise any insurance claims during a particular policy year or for consecutive policy years. Policyholders with a claim-free record can get from 20% to 50% discount on premium amounts from the No Claim Bonus reward. However, individuals should keep in mind that this reward does not depend on the make and age of the insured vehicle.

While purchasing a comprehensive motor insurance policy, an individual cannot get an NCB unless he or she opts for an NCB transfer. After renewing the car insurance policy for the first time, the policyholder will be eligible for a 20% discount on premiums from the NCB. This scenario only applies if the policyholder does not make any claims in the past years. Further, the rate of discount will increase with each claim-free year by up to 50% at the end of five claim-free years.

How is No Claim Bonus in car insurance calculated?

Calculating a No Claim Bonus in any motor insurance policy is a very straightforward procedure. Most insurance providers extend a No Claim Bonus calculator on their official websites to make the calculation process simpler. In the case of motor insurance, NCB starts after the first renewal of the insurance policy. At present, a No Claim Bonus starts at 20% after the renewal and goes up to 50% after five consecutive years of no-claim record.

The NCB will be terminated in case any of the following situations arise:

  • The policyholder fails to renew an insurance plan within ninety days of its expiry date.

  • The policyholder files an insurance claim during the policy year.

Importance of a No Claim Bonus

No Claim Bonus is an important facility due to the following reasons:

  • Policyholders who take care of their insured vehicle and use their discretion while filing claims enjoy the benefits of NCB.

  • Making timely policy renewals and not raising insurance claims are the deciding factors for an NCB.

  • Policyholders with a No Claim Bonus can save on policy premiums starting from 20% and going up to 50%.

  • Changing the vehicle or the insurance-providing company will not result in the loss of no claim bonus.

Terms and conditions of a No Claim Bonus transfer

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

  • One can only opt for an NCB transfer from one vehicle to another if the policyholder remains the same

  • During a policy renewal, one can transfer NCB from one insurance provider to another

  • Policyholders will need to submit an NCB certificate from the current insurer in case of offline applications

Documents required for a No Claim Bonus transfer:

Here is a list of documents required for a No Claim Bonus transfer:

  • Photocopy of car insurance

  • Car delivery note copy

  • Transfer application

  • NCB certificate

  • Buyer-seller agreement (Form 29 and 30)

  • Ownership transfer certificate copy

  • Copy of booking receipt in case purchasing a new car


Insurance is the subject matter of solicitation. Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited and ManipalCigna Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Visitors are hereby informed that their information submitted on the website may be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt Ltd, etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective value-added service provider or Assistance company.

Note – While we have made all efforts and taken utmost care in gathering precise information about the products, features, benefits, etc. However, BFL cannot be held liable for any direct or indirect damage/loss. We request our customers to conduct their research about these products and refer to the respective product’s sales brochures before concluding their sale.