Know What is NCB in Car Insurance Online India

No Claim Bonus On Car Insurance - When it comes to car insurance, compensation is offered to policyholders on their request for a claim against the damage or loss incurred by their cars due to an accident or any mishap. This way insurance helps the people who face some adverse events involving their cars. But, what about those who drive responsibly and manage to keep their cars safe? However, if no claim is made, the insured is entitled to receive a reward known as No Claim Bonus.

What Is No Claim Bonus (NCB)?

The No Claim Bonus is a reward offered as a discount on the own-damage premium of an insurance cover. The policyholders are provided with this bonus for not making any claim request against their insurance cover in a policy year. In order to avail this NCB discount, one should not make any claim in a policy year and ensure the policy renewal within the stipulated time.

How To Calculate No Claim Bonus (NCB)?

The No Claim Bonus discount calculation is cumulative in nature and ranges from 20% to 50%. Under this benefit, the percentage of discount tends to increase with every claim-free year. The bonus earning can begin from a 20% discount and can go up to 50% discount over a span of 5 consecutive claim-free policy years. Refer to the table given below to understand how NCB increases every year:

Number of Claim-free Years


One claim-free year


Two consecutive claim-free years


Three consecutive claim-free years


Four consecutive claim-free years


Five consecutive claim-free years


When Is No Claim Bonus Applicable?

No Claim Bonus can be applied at the time of renewal of the policy after a claim-free year. The discount earned under this benefit is applicable to the own-damage premium only and not on the third party premium. A single claim request in between can bring an end to the expansion of the cumulative bonus developed with the consecutive claim-free years.

Can No Claim Bonus Get Transferred?

A policyholder earns the No Claim Bonus, not the car. Hence, when someone buys or sells an old car or renews the car insurance from another insurance provider, he or she is still eligible to avail this discount provided no claim has been made by them in the previous policy year. However, policyholders need to acquire an NBC transfer certificate from their insurer to continue to avail this benefit. To ensure this, one needs to renew the policy by its expiry or within 90 days from its expiry date.

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Car insurance becomes economical for responsible drivers and policyholders. The No Claim Bonus is a reward that can be availed by raising no claim against a policy and renewing the car insurance policy within the stipulated time period. People should always keep the benefits of NCB in mind and try to avail it by driving safely.

Add-ons For Your Car Insurance Policy

  • Zero Depreciation

    A car's value depreciates constantly with time. Thus, at the time of a claim settlement, the depreciated value of a car is deducted from the claim amount. However, by opting for a zero depreciation add-on you can shift the liability of the depreciation cost to the insurer and get the entire claim amount without any deduction of the depreciation sum. This add-on is generally available till the age of 5 years of car, however, the car age limit varies from insurer to insurer.

  • NCB Cover

    A No Claim Bonus (NCB) is a discount given by the insurer in the premium amount to a car insurance policy holder for not making a claim in the entire tenure of the four wheeler insurance policy. This discount is not available if the policy holder has made even a single claim. However, with the NCB cover, a policyholder will be entitled to receive an NCB discount despite having made a claim subject terms and conditions of insurance company. The NCB discount keeps on increasing with every claim-free year until it reaches 50%.

  • Engine Protection Cover

    A car's engine is by default not covered under either a comprehensive or a standalone own-damage car insurance policy. And therefore, if it gets damaged due water-logging or oil leakage, your insurance company is not liable to pay for its damages. But, if you opt for the add-on known as Engine Cover, you can get your car's engine insured by the insurer for damages incurred due to water ingression as well as leakage of lubricants. Engine Cover is one of the most popular car insurance add-ons and is available against the payment of a nominal premium.

  • Invoice Cover

    If you have a return to invoice cover added on to your comprehensive car insurance policy, you can claim the total ex-showroom price of your four wheeler, taxes and registration charges, in case of total loss. In case of total constructive loss (more than 70% of damage) or theft of your car, an insurance company pays the Insured Declared Value (IDV) of your car as compensation. However, this IDV is lesser than the actual amount paid by you at the time of purchasing your car. When you opt for the add-on called Return To Invoice Cover with your car insurance policy, the insurance company pays the total ex-showroom price of your car plus the taxes and registration charges incurred at the time of purchase, as the claim amount in case of total loss.

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