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How Can I Benefit From NCB?

Updated On Oct 18, 2023

How Can I Benefit From NCB?

NCB stands for No Claim Bonus. When you renew your insurance coverage, you can generally get an NCB discount on the premium. It is the reward given by motor insurance firms to owners of insured vehicles if they avoid filing any claims throughout the term of the policy. Next year, this incentive can be utilised as a discount on the cost of auto insurance when the policy is renewed.

How Can I Benefit From NCB?

What Is Actually Meant By NCB?

Let's understand this by an example. You continue a year of safe driving and submit no claims while the  car insurance policy is in effect. Your insurance needs to be renewed as your current policy's term is about to expire. Your insurance company appreciates that you drive defensively and wants to give you a discount for not filing a claim. As a result, the Car Insurance No Claim Bonus is the reduction the insurer gives you when you renew your insurance.

How Can I Benefit From NCB?

Under a comprehensive auto insurance policy, the No Claim Bonus offers car owners a number of advantages such as:

  • Discount on Premium - No Claim Bonus is regarded as evidence of one's ability to drive responsibly and to keep the insured vehicle in good working condition. As a result, by refraining from filing any claims during the prior term of his insurance, the policyholder can receive incentives in the form of NCB.
  • Reduced Premium - The No Claim Bonus enables a policyholder to receive at least a 20% and as much as a 50% discount on the cost of his auto insurance. The NCB discount % is given to the policyholder for each year without a claim. With the help of this discount, he may be able to lower the rate he must pay when his auto insurance is renewed.
  • Greater Savings - By abiding by all the requirements, the percentage of NCB will rise. When the insurance is renewed, those who haven't filed a claim in five years can receive a large discount on their premium of up to 50%.
  • Who is Insured - The NCB is provided to the policyholder/car owner and not the vehicle, which is a key lesson to remember. Therefore, the NCB stays with him as long as he keeps renewing car insurance policies, regardless of whether he purchases a new car or sells his insured vehicle. It won't follow the automobile when it changes hands.
  • Transferable to Some other Car/Insurer - If the policyholder switches cars, the No Claim Bonus can be readily transferred to the new vehicle. In addition, if the owner of the car decides to purchase insurance from a different motor insurance provider, it can also be moved from one insurer to another. To transfer the NCB, the policyholder will need an NCB Certificate from their prior insurer.

Important Things To Be Noted In Relation To NCB

The basic coverage required by law, third-party auto insurance, is not eligible for the NCB discount. Typically, up to 20% of the entire premium is made up of third-party liability insurance premiums.

Therefore, the earned NCB percentage will be determined by subtracting the third-party responsibility premium from the entire premium. Understanding this is crucial because many automobile owners, who compute the NCB on the entire premium and believe they have gotten an inadequate discount, frequently wonder if there has been a mathematical error.

Even if you transfer your insurance policies with no bad intention and accidentally enter any amount for NCB, the results could be disastrous. Your insurance company may completely deny your auto insurance claim if you declare your NCB incorrectly. Make sure to disclose any claims you may have had with your former insurer during the previous policy year if you are switching your auto insurance coverage. 


It is quite evident that NCB is a tool that allows a policyholder to reduce his subsequent car insurance premiums from an insurance company. The presence of this NCB option shall be carefully considered while choosing a car insurance policy.

Also Read: 

How To Renew My Car Insurance Policy?

Why Should You Buy Third Party Car Insurance?



This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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