NCB- No Claim Bonus

Every year, India sees a surge in the number of cars on the road. Today having a car has become a necessity. Also, motor insurance is compulsory by law in India and car insurance must be taken at the time of purchase.

The good part about compulsory motor insurance is that most insurance companies reward policyholders with No Claim Bonus (NCB). However, there is very little awareness about NCB. It is an essential part of motor insurance that policyholders need to understand.

What Is NCB?

With each passing year, where other insurance premiums tend to rise, car and bike insurance have a beneficial NCB, bringing down premium amounts.

No Claim Bonus is simply a perk given to policyholders for not making a claim in previous years. NCB in motor insurance can fetch up to a 20-50% discount on the payable premium amount by maintaining a claim-free record. NCB is not related to the make or age of the vehicle but solely on the claim record of the policyholder.

While purchasing a comprehensive motor insurance policy, you are generally not eligible for NCB unless in the case of NCB transfer. The policyholder will be eligible for NCB on the first renewal of the motor insurance policy, starting from 20%. This is applicable only if no claims have been made in the preceding years. The discount increases with every claim-free year up to a maximum of 50% at the end of five claim-free years.

How to Calculate No Claim Bonus in Car Insurance?

Calculating NCB in car insurance is a straightforward process. Most insurance companies have a No Claim Bonus Calculator on their websites to ease the process of calculation. NCB in motor insurance starts from the second year of the policy. Currently, NCB in car insurance begins with 20% and goes up to 50% in the sixth year.

NCB Termination

NCB remains valid as long as there is no claim. Two things can lead to the termination of NCB in motor insurance:
a) If a claim is made
b) If the policy is not renewed within 90 days from the date of expiry.

Benefits of No Claim Bonus in auto insurance

Here are the significant benefits associated with NCB:

Enticing rewards: The NCB in car insurance, rewards policyholders for taking care of the car and driving safely.

You matter not your car: NCB in motor insurance is based on your claim record and not on the make or model of your car. Not making claims and timely policy renewals are the deciding factors.

Lucrative savings: Substantial savings can be made by availing of the No Claim Bonus in car insurance. Savings start from 20% on annual premium going up to 50%.

Easily transferable: Change of car or insurer will not result in loss of NCB. As long as the new policy is taken before the expiration of the old one, NCB remains valid. And NCB transfer is an easy and hassle-free process.