Car Insurance 731 views April 9, 2021

Car insurance companies offer a No Claim Bonus (NCB) of 20-50% if the policyholder does not claim during the policy tenure. However, the NCB doesn’t apply to the premium of third-party liability cover. And, the third-party liability insurance premium accounts for upto 20% of the total premium amount. So, the earned NCB percentage will be calculated on the total premium minus the third-party liability premium of your car insurance. Know about NCB in detail on this post below and find out how much discount you’ll receive on your car insurance after a claim-free year.

Maximum NCB on Car Insurance

The maximum NCB discount is capped at 50%, and you will earn this after five claim-free years. And when you’ve earned a 50% discount, you will not be eligible to earn further discounts on your car insurance even if you cross another no-claim year. The following is a representative on NCB increase during the policy tenure:

Claim-free Years (In Years)No Claim Bonus (NCB)
120%
225%
335%
445%
550%

What Happens to the Accumulated NCB When You Buy a New or Second-hand Car?

You should know that NCB is offered to the owner of the car, and not the car. So, if you’ve earned NCB discounts on your existing car, and now you are purchasing another car, you can transfer the accumulated NCB benefits to the new car. However, if you purchase a second-hand car, the NCB of that particular vehicle could be transferred only if the previous owner agrees to transfer the same.

What is the Validity of NCB?

Your car insurance NCB will remain valid until you make a claim. The claim-free years need to be subsequent if you want to save your previously accumulated NCB. Because even if you make a single claim, you lose all the previous years’ accumulated NCB. Your NCB will also cease if you fail to renew the policy within three months from the policy expiration date. If you have earned the maximum number of NCB, you will get a specific time frame to utilize the NCB, although it can differ from one insurer to another. And, if you don’t utilize your NCB for a specific period, you might lose the accumulated NCB.

What is an NCB Certificate and Who Generates it?

NCB certificate, which is also known as the NCB reserving/retention letter, proves that you have earned a bonus under your car insurance. This will come in handy when you sell your car, as it helps you get discounts on premiums when buying a new policy for the next car.

The NCB is non-transferrable to the buyer and stays with you unless you agree to pass it on the former’s request. The NCB Certificate will remain valid for 3 years from the date of its issuance. This means within 3 years, you can transfer the NCB discount to your new policy. The NCB certificate is issued by the previous insurance company.

Compare Different Car Insurance Companies NCB Offers

We have listed the top car insurance companies below along with their NCB offers, so compare them and shortlist your insurer –

CompanyNo Claim Bonus (NCB)
HDFC ERGO General Insurance

  1. After 1 claim-free-year - 20%

  2. After 2 consecutive claim-free years - 25%

  3. After 3 consecutive claim-free-years - 35%

  4. After 4 consecutive claim-free-years - 45%

  5. After 5 consecutive claim-free-years - 50%
Tata AIG General Insurance

  1. If no claim is made during the previous policy year - 20%

  2. If no claim is made during 2 consecutive policy years - 25%

  3. If no claim is made during 3 consecutive policy years - 35%

  4. If no claim is made during 4 consecutive policy years - 45%

  5. If no claim is made during 5 consecutive policy years - 50%
ICICI Lombard General InsuranceUp to 50%
Bharti AXA General Insurance

  1. If no claim is made or pending during the preceding full year of insurance - 20%

  2. If no claim is made or pending during the 2 consecutive years of insurance - 25%

  3. If no claim is made or pending during the 3 consecutive years of insurance - 35%

  4. If no claim is made or pending during the 4 consecutive years of insurance - 45%

  5. If no claim is made or pending during the 2 consecutive years of insurance - 50%
Reliance General InsuranceUp to 50%

Things to Know about Car Insurance NCB

  1. You can’t share your NCB between two or more policies
  2. If you cancel your policy before the renewal date, you will lose all your NCB benefits for that specific year only
  3. You can protect your NCB by paying an extra premium for an add-on cover. The no-claim bonus protection add-on cover will protect your NCB even if you claim your policy in any particular year.

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