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What You Need to Know About ‘No Claim Bonus’ In Motor Insurance

A no claim bonus in motor insurance gives you a special benefit by reducing the car insurance premium

Photo Credit : Shutterstock


Buying your own car is a personal milestone in one’s life. Hence, securing the possession against unexpected losses or buying an insurance cover becomes mandatory. However, many people think insurance is a waste of money as they believe they will not have to claim and there is no return for the premium paid. But in such cases, a no claim bonus in motor insurance gives you a special benefit by reducing the car insurance premium

No Claim Bonus or NCB is a discount on the premium provided by the insurer during an insurance renewal if the insured has not filed any claims in the policy year. For instance, you gain a 20 per cent NCB discount for the first policy year for not making any claims., You keep gaining an additional five per cent from your second consecutive year of making no claims. NCB can go to a maximum reduction of 50 per cent in your sixth consecutive year. Most insurance providers offer policyholders benefits like No Claim Bonus (NCB). If you buy an ‘Own Damage’ or ‘Comprehensive car insurance policy’, you are eligible for an NCB.

Benefits of NCB in Car Insurance

  • Connected to you and not your car: NCB is connected to you as an individual and not your insured vehicle. For instance, no matter which car you own, you can continue to benefit from an NCB as long as you renew your car insurance policy before the expiry date.
  • Reduced insurance premium: An NCB will help you save on the car insurance premium during a renewal by discounting the actual premium. At first, an NCB discount will save you at least 20 per cent of your annual car insurance premium.
  • Easily Transferable: The process of transferring is simple in case you are changing your car or the insurer. The only thing that you need to be careful about is to shift your policy before your current one already expires.

 Important things to know about NCB in Insurance

  • NCB termination: You will not get the benefit of NCB in case you fail to renew the existing insurance policy within 90 days from the date of expiry. NCB will be terminated.
  • NCB Transferring: If you have not made any claims and decide to sell your car and buy another car in the middle of the policy year, you can apply for an NCB transfer. If you are eligible for NCB, all that you have to do is, write to your insurance provider informing them about the sale of your old car and request them to transfer your NCB to the new car.
  • NCB Certificate/Proof: It is proof for not making any claims during the policy year and insurers provide it at the end of your policy term. This is useful when you plan on transferring to a new insurer at the time of your policy renewal, all you have to show is your last year’s policy document or renewal notice that mentions your NCB

Rewards of all types are positive and improve the commitment to not making mistakes. NCB is a reward that you will get for being a good and responsible driver and car owner.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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motor insurance

Vivek Chaturvedi

The author is Head of Marketing, Digit Insurance

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