Know About NCB Certificate in a Car Insurance

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NCB Certificate is a non-transferable document that is required to retain your existing NCB reward when you purchase a motor insurance policy for your new car. It is proof of the NCB reward that you have earned during your previous car insurance policy tenure.

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      What is a No Claim Bonus?

      NCB or No Claim Bonus refers to the discount given in the form of a bonus for driving your car safely and not raising a claim in a policy year. You can avail this discount at the time of policy renewal and can accumulate a discount of up to 50% on your insurance premium. Below are a few important points that you must know about your No Claim Bonus-

      1. You Can Reduce Your Own Damage Premium Up to 50%

        You can earn an NCB discount of up to 50% by the end of five years of making zero claims. If you are already earning a 50% discount for not raising a single claim in the past 5 years, you cannot earn any further concessions. However, this 50% NCB continues to stay until you are not raising a claim. This is how NCB discount works in car insurance.

      2. NCB (No Claim Bonus) is Applicable Only for Own-damages

        Remember your NCB discount is not applicable for third-party car insurance premiums, that is the mandatory cover in India. Therefore, the earned NCB percentage is calculated on only the own-damage premium. Usually, car owners get confused while calculating their claim bonus and wonder why there is an error in a discounted amount.

      3. You Can Transfer Your NCB When You Buy a New Car

        You can easily transfer your NCB from an old car to a new car. An NCB certificate in car insurance belongs to the car owner but not the car itself. However, the NCB certificate is not transferable from one owner to another owner of the car.

        Therefore, you can easily transfer the accumulated NCB discounts on your old car to a new car and this is valid for three years.

      4. Do Not Write Incorrect No Claim Bonus Percentage

        Never write any random digit for NCB percentage while switching your car insurance policies because it can lead you into trouble. In case of incorrect NCB, your insurer can reject your claim in the future. In case you are switching your insurer, give them right correct information if you have raised a claim with your previous insurer in the policy tenure.

        Your new insurer will crosscheck all the information while offering you the policy. So, there is no point in hiding it.

      Documents Required to Transfer NCB Certificate

      The documents required to submit as a proof to transfer your NCB certificate include the following documents-

      1. Sell Letter- This is a document issued by the Regional Transport Office (RTO) in the name of the car buyer and acts as proof that you have handed over the car to the new buyer. Usually, it is a transfer agreement of all the liabilities of the car to the buyer.
      2. Previous Year Policy (PYP)- PYP refers to the insurance policy documents that you had issued for your car from the last insurer.
      3. Declaration Letter- It is issued by a previous insurer where you have to acknowledge the terms & conditions mentioned in the documents. Ensure that you have provided the correct information as wrong or misleading information gives a right to your new insurer to deny your claims anytime.


      The NCB is a reward for driving carefully and being safe on the road. One should always keep in mind the above-mentioned factors to retain their accumulated bonus as much as possible. When you buy four-wheeler insurance

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