Many car owners are unaware of the No Claim Bonus (NCB) and how it can benefit them under their car insurance policy. NCB is essentially a reward for being a responsible driver, offering a discount on your car insurance premium for not making any claims during your policy term. However, despite this potential saving, many drivers struggle with understanding how to claim their NCB or even if they’re eligible. This confusion often leads to missed opportunities to reduce their insurance costs. Herein, we will talk about the entire process of claiming your NCB under your car insurance, address common questions, and clarify any doubts you may have. With the right information, you’ll be able to make the most of this valuable benefit and enjoy savings on your next premium.
The No Claim Bonus is a discount on the own damage (OD) premium portion of your car insurance. It’s granted when you do not file any claims during the policy year. The bonus starts at 20% after the first claim-free year and increases progressively, capping at 50% after five claim-free years.
| Claim-Free Years | NCB Discount on OD Premium |
|---|---|
| After 1 year | 20% |
| After 2 years | 25% |
| After 3 years | 35% |
| After 4 years | 45% |
| After 5 years | 50% |
This bonus only applies to the OD component of the premium, not to third-party motor insurance, which has fixed premiums set by regulatory authorities.
Let’s take an example: if your car insurance premium is ₹10,000, and ₹6,000 of it is for the own damage portion, you can get an NCB discount. After 3 years of claim-free driving, you’ll be eligible for a 35% NCB. This means a discount of ₹2,100 (35% of ₹6,000), reducing your renewal premium to ₹7,900.
Renewing your car insurance and claiming your NCB is simple if you follow these steps:
Avoid Filing Minor Claims
If you file any claim, your NCB will reset to zero. Even small claims can lead to the loss of accumulated NCB. It’s wise to perform a cost-benefit analysis before filing a claim. If the repair cost is less than or close to the NCB you’d lose, it’s better to handle the expense yourself.
Renew Your Policy On Time
NCB is only valid if the insurance policy is renewed within 90 days of expiry. If you miss this grace period, you’ll lose the bonus. Timely renewal ensures that your claim-free record stays intact.
Declare Your NCB Honestly
When renewing or switching insurers, always declare the correct NCB percentage. Misrepresentation can lead to policy cancellation or rejection of claims. Insurers like Tata AIG validate your NCB details through previous policy records, so be honest while declaring it.
The significant part about NCB is that it’s linked to the policyholder, not the vehicle. This means you can transfer your NCB even when you:
Sell your old car and buy a new one
Switch insurers
Here’s how to transfer your NCB:
Request an NCB Certificate
Contact your previous insurer and request an NCB certificate. This document confirms your claim-free history and NCB percentage.
Submit Required Documents
Provide the following to your new insurer:
Copy of the old insurance policy
Sale agreement or transfer papers (Form 29 & 30)
Proof of new vehicle purchase
Vehicle registration documents
If you file a claim, even for minor damage, your NCB will reset to zero at the next renewal. For instance, if you’ve had four claim-free years and file a claim in the fifth year, your 45% NCB will be forfeited. The following year, you’ll start from scratch, earning 20% after the next claim-free year.
To preserve your NCB despite filing a claim, insurers like Tata AIG offer an NCB Protector Add-On. This add-on lets you file one or two claims during the policy year without affecting your NCB.
Ideal for owners of high-value vehicles or those living in areas prone to risks like floods, riots, or theft, the NCB Protector ensures your discounts remain intact. However, this add-on is only available with comprehensive policies and not with standalone third-party motor insurance.
Here’s what you need to know about NCB:
Applicable Only to OD Premium: NCB applies only to the own damage portion, not the third-party motor insurance.
Non-Transferable to New Owner: If you sell your vehicle, the NCB stays with you, the original policyholder.
Time-Bound Validity: You must claim your NCB within 90 days of policy expiry. Missing the renewal deadline means you lose the NCB.
Accurate Declaration Is Crucial: Always declare the correct NCB percentage when transferring or renewing your policy. Misrepresentation could lead to policy cancellation.
There are situations when your NCB becomes void:
If you file a claim during the policy term
If you don’t renew your policy within the 90-day renewal window.
If you transfer ownership of the vehicle without retaining the NCB
If you switch insurers without providing proof of NCB
If fraudulent claims or misrepresentations occur
In these cases, your NCB is reset, and you’ll need to start your claim-free journey again.
If you’re purchasing a new vehicle, you can still use your accumulated NCB to lower your premium. Here’s how:
Get an NCB Certificate from your previous insurer.
Submit documents such as the sale agreement and vehicle registration certificate.
Inform the New Insurer when buying the policy.
The No Claim Bonus (NCB) is a valuable feature in car insurance that rewards safe driving and offers long-term savings. Whether you’re renewing your existing policy or buying a new vehicle, claiming and protecting your NCB is a smart way to keep your insurance affordable.
Avoiding minor claims and opting for the NCB Protector Add-On will help you keep your NCB intact. By understanding how NCB works and following the right steps, you can maximise your savings while maintaining comprehensive coverage.
So, protect your NCB, drive safely, and enjoy lower premiums year after year!
Disclaimer: This content is part of a marketing initiative.