No Claim Bonus (NCB) in Car Insurance
No Claim Bonus or NCB in car insurance is a reward given to policyholders by insurance companies for not raising any claims during the policy term. The NCB not only promotes safe driving, but also offers discounts on car insurance renewal premiums.
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What is No Claim Bonus and How Does it Work in Car Insurance?
The NCB in insurance gives you a discount on your premium when you renew your policy. It starts with 20% on your first renewal, and increases each year to a maximum of 50% after 5 consecutive claim-free years. Let's look at how the no-claim bonus works in car insurance:
- Applies Only to Own-Damage (OD): A comprehensive car insurance policy premium has two components- Third-Party and Own-Damage, where the NCB applies only to the Own-Damage part, and does not lower the mandatory fixed third-party premium.
- Attached to the Driver, Not the Vehicle: The NCB in insurance is tied to the policyholder, not the car. If you sell your car and buy a new one, you can transfer your NCB to the new car.
- Becomes Zero Upon Claiming: Under standard motor insurance policies, raising a claim even for a small scratch will reset your accumulated NCB to 0%, unless you have the NCB protection add-on.
Benefits of NCB in Car Insurance
No claim bonus in car insurance offers these benefits to the policyholders:
Portability Across Insurers
If you switch to a different car insurance company, you can carry forward your earned NCB by providing an NCB certificate from your previous insurer to the new one.
Incentive for Safe Driving
NCB discounts encourage responsible driving and timely car maintenance, so policyholders can avoid accidents and, consequently, claims.
Lower Ownership Costs
Over time, a 50% discount on the own damage premium significantly reduces the long-term cost of comprehensive car insurance.
No Claim Bonus Calculation for Car Insurance
Here is the table that shows how is the No Claim Bonus calculated in motor insurance as per the number of claim-free years:
| Number of Claim-free Years | NCB Percentage |
|---|---|
| 1st-year renewal | 20% |
| 2nd-year renewal | 25% |
| 3rd-year renewal | 35% |
| 4th-year renewal | 45% |
| 5th-year renewal | 50% |
Consider this example;
The own damage premium for your 1st year car insurance is Rs. 22,000, and if you do not raise any claims, your car insurance renewal premium for the 2nd year will be as follows:
| Policy Year | NCB | Premium Amount |
|---|---|---|
| 1st-year renewal | - | Rs. 22,000 |
| 2nd-year renewal | 20% | Rs. 17,600 |
| Savings on Premium | Rs. 4,400 | |
How to Transfer Your No Claim Bonus?
You can easily transfer no claim bonus to your new car insurance using the steps mentioned below:
- While renewing your car insurance online, share your previous policy number, correct NCB, and the previous insurer's name with your new insurance provider.
- The insurer will transfer your existing no claim bonus to your new policy, and you can continue enjoying the same benefits.
- For an offline NCB transfer, simply contact your old insurer and submit the required documents. Your old insurer will provide you with an NCB certificate, which you need to present to the new insurer for the NCB transfer.
Note: The NCB is transferable only if the owner stays the same while changing the car or the insurer. You cannot transfer the NCB if you sell the car. While switching the insurer, your existing insurance company will also have to provide proof of your accumulated NCB.
Documents Required for NCB Transfer
To transfer your no claim bonus when switching insurers or buying a new car, have these documents handy:
How to Protect Your No Claim Bonus?
You can protect your accumulated No Claim Bonus by opting for an NCB Protector add-on while purchasing a comprehensive or an own damage policy for a nominal extra\ premium. This additional cover will help you save your NCB discount even if you raise a claim in the policy year. However, the number of claims you can raise under the NCB protector add-on varies from one insurer to another.
Besides, you can follow these useful tips to protect No Claim Bonus in your car insurance policy:
Drive Responsibly
The easiest way to protect your NCB is by driving safely and responsibly to avoid any collisions and road accidents.
Avoid Filing Small Claims
Try to avoid filing a claim for minor damages, such as small scratches, minor bumps, etc., to keep your NCB intact.
Renew Car Insurance Timely
A break in your policy can also terminate your NCB completely. Hence, it is important to renew your car insurance timely.
When Do You Lose Your No Claim Bonus?
You will lose all your earned No Claim Bonus, and it will become zero under these circumstances:
- Upon Raising a Claim: Any claim you make for accidental damage or theft will reset your NCB to 0%.
- Upon Policy Expiry: If your policy expires and you do not renew it within 90 days, known as the car insurance grace period, all your accumulated NCB is lost.
FAQs About No Claim Bonus in Car Insurance
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Q1. What is the full form of NCB in car insurance?
Ans: The full form for NCB in car insurance is No Claim Bonus NCB is a reward given to policyholders for not raising any claim during the policy year. -
Q2. What is the eligibility for no claim bonus in car insurance?
Ans: Policyholders are eligible for NCB in insurance if they do not make any claim against their car insurance in a policy year and renew it before expiry. -
Q3. Can I transfer No Claim Bonus to a new insurer?
Ans: Yes, you can transfer your No Claim Bonus if you have not made any claims against your previous car insurance policy and wish to switch insurer at the time of renewal. Your NCB will be transferred to the new insurer after verification. -
Q4. How much discount can I get with No Claim Bonus in car insurance?
Ans: You can enjoy up to 50% discount on your car insurance renewal premium with NCB. It starts at 20% from the second year and increases each year, reaching a maximum of 50% after five claim-free years. -
Q5. Is NCB applicable in third party car insurance?
Ans: No. NCB benefits are only available with comprehensive or standalone own-damage car insurance policies. -
Q6. Does an NCB expire?
Ans: Yes, your NCB in car insurance will expire or terminate if you make any claim in the policy year or fail to renew your policy within 90 days of its expiry. -
Q7. What is 20% NCB in insurance?
Ans: 20% NCB is a discount your insurer gives on your 1st year car insurance renewal premium. -
Q8. How much NCB can I get after 3 years?
Ans: You will get 35% NCB with your car insurance for 3 consecutive claim-free years. -
Q9. What happens to NCB in the case of a total loss arising due to a major car accident or car theft?
Ans: You will lose your accumulated NCB in case of total loss or theft as your insurer will settle your car insurance claim. However, if you have the NCB protector add-on under your car insurance, you can retain your NCB discount in case of a total loss. -
Q10. What is the maximum NCB limit?
Ans: The maximum limit for NCB in car insurance is 50% for five consecutive claim-free years. -
Q11. Is no claim bonus in car insurance applicable for multiple cars?
Ans: No. You need to buy separate motor insurance policies for every car to earn NCB discount on each of them for every claim-free year. -
Q12. Will my NCB benefits terminate even if I claim for a small repair?
Ans: Yes. Without an NCB Protector add-on, you will lose your NCB benefits even if you make a minor claim. -
Q13. Is adding a No Claim Bonus add-on to my car insurance policy a good idea?
Ans: Yes, adding a No Claim Bonus (NCB) protector add-on to your motor insurance policy is a great idea to protect NCB in car insurance. It helps you keep your NCB benefits even if you make a claim against your car insurance policy.
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#Rs 2094/- per annum is the price for third-party motor insurance for private cars (non-commercial) of not more than 1000cc
*Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.
+Savings are based on the maximum discount on own damage premium as offered by our insurer partners.
^Lowest Price Guaranteed is based on certifications shared by insurers with us. Policybazaar will facilitate price matching subject to the terms and conditions of select insurers.
##Claim Assurance Program: Pick-up and drop facility available in 1400+ select network garages. On-ground workshop team available in select workshops. Repair warranty on parts at the sole discretion of insurance companies. Dedicated Claims Manager. 24x7 Claim Assistance.
