No Claim Bonus (NCB) is one of the most powerful tools for saving money on your car or bike insurance renewal. It’s a reward for being a safe driver and not filing any claims during the policy year. Over time, your NCB can reduce your premium by up to 50%. But to get the most out of it, you need to understand how it works, when it resets, and how to transfer it when switching insurers.
What is No Claim Bonus (NCB)?
NCB is a discount offered by insurers on the own-damage premium during renewal if no claims were made in the previous policy year. It starts at 20% and increases each consecutive claim-free year up to 50%.
NCB Slab (Year-wise Discount)
| Claim-Free Years |
NCB Discount |
| After 1 year |
20% |
| After 2 years |
25% |
| After 3 years |
35% |
| After 4 years |
45% |
| After 5 years |
50% |
Note: The NCB applies only to the own-damage portion of the premium, not the total premium or third-party premium.
How NCB Impacts Your Premium
Example:
Ravi has a bike with an annual own-damage premium of ₹3,000. After 3 claim-free years, his NCB is 35%. His renewed own-damage premium drops to ₹1,950, saving him ₹1,050.
Impact Summary:
- NCB is cumulative - the longer you go claim-free, the bigger the discount.
- A single claim can reset your NCB to zero.
- Even minor claims may not be worth it if they erase your NCB savings.
How to Retain Your NCB
- Avoid filing small claims - pay minor repair costs out-of-pocket.
- Always renew your policy before the expiry or within the 90-day grace period.
- Don’t skip renewal for more than 90 days or your NCB lapses.
Can You Transfer NCB to a New Insurer or Vehicle?
Yes. NCB is tied to the policyholder, not the vehicle. You can:
- Switch insurers and retain your NCB using an NCB certificate.
- Sell your vehicle, buy a new one, and apply your old NCB to the new policy.
Tip: Ask your current insurer for an NCB retention certificate when switching providers.
Common Misconceptions
- NCB doesn’t apply on first-time policies - it’s only for renewals.
- Third-party premiums aren’t discounted - NCB applies only to own-damage premium.
- Transferring NCB is not automatic - it requires a certificate and clear request.
Conclusion
NCB is a reward for responsible driving and a smart way to reduce your insurance costs. If you keep your claim history clean and renew your policies on time, you’ll enjoy big savings every year - without compromising coverage.