How No-Claim Bonus (NCB) Can Save You Money on Vehicle Insurance
- Rohit Lokhande
- Aug 26
- 2 min read
Updated: 3 days ago
Summary
The No-Claim Bonus (NCB) is one of the easiest ways to reduce your vehicle insurance premium while rewarding safe driving habits. Many vehicle owners don’t realize its full potential and miss out on significant savings. This blog explains what NCB is, how it works, the percentage of discounts you can earn, and tips to maximize this benefit for long-term cost savings.
Table of Contents
What Is No-Claim Bonus (NCB)?
How Does NCB Work?
NCB Discount Rates in India
Benefits of No-Claim Bonus
Situations That Can Void Your NCB
Tips to Maximize Your NCB Savings
FAQs
What Is No-Claim Bonus (NCB)?
NCB is a reward offered by insurers to policyholders who do not make any claims during a policy year. It comes in the form of a discount on the premium during renewal of a comprehensive or own-damage policy.
Example: If you didn’t make any claim this year, your premium for the next year can reduce by up to 20%, and the discount keeps increasing with every claim-free year.
How Does NCB Work?
Applicable only on the own-damage portion of your premium (not on third-party cover).
NCB starts at 20% for the first claim-free year and can go up to 50% for five consecutive years.
If you make a claim, the NCB resets back to zero.
NCB Discount Rates in India
Claim-Free Years | NCB Discount (%) |
1 Year | 20% |
2 Years | 25% |
3 Years | 35% |
4 Years | 45% |
5+ Years | 50% (maximum) |
Benefits of No-Claim Bonus
Direct Savings: Up to 50% discount on own-damage premiums.
Transferable: Can be transferred when switching insurers or buying a new car.
Reward for Safe Driving: Encourages responsible driving by rewarding claim-free years.
Cumulative Benefit: The longer you go without a claim, the higher your savings.
Situations That Can Void Your NCB
Filing a claim, even for a small repair.
Not renewing your policy within the grace period (usually 90 days) after expiry.
Shifting to only third-party insurance (NCB applies only to own-damage cover).
Tips to Maximize Your NCB Savings
Opt for small repairs out-of-pocket instead of making minor claims.
Always renew on time to avoid losing your accumulated NCB.
Consider buying an NCB Protector Add-On to safeguard your discount even after a claim.
Compare renewal premiums across insurers and transfer your NCB to get the best deal.
FAQ's
1. Does NCB apply to both third-party and comprehensive insurance?
No, NCB applies only to the own-damage portion of a comprehensive policy.
2. Can I transfer my NCB to a new vehicle?
Yes, NCB is linked to the policyholder, not the vehicle, and can be transferred.
3. What is the maximum No-Claim Bonus I can get?
The maximum NCB in India is 50% after five consecutive claim-free years.
4. Will I lose my NCB if I switch insurance companies?
No, you can transfer your NCB when moving to another insurer.
5. How can I protect my NCB even after making a claim?
By opting for an NCB Protector Add-On Cover.
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