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MOTOR INSURANCE BASICS

Drive safely. Pay less.

A claim-free year can do more than give you peace of mind. It can also help you earn a No Claim Bonus on your motor insurance renewal.

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CLAIM-FREE REWARD NCB

Your safest year on the road can become your biggest insurance discount.

No Claim Bonus, commonly called NCB, is a discount earned for claim-free insurance years. It applies to the Own Damage portion of eligible motor insurance premium rather than the entire premium. :contentReference[oaicite:1]{index=1}

So, what exactly is NCB?

Think of it as a reward for maintaining a claim-free record.

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A claim-free reward

If you complete an eligible policy period without making or having a pending Own Damage claim, you can become eligible for NCB at renewal, subject to the policy terms.

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A premium discount

NCB is a discount on the Own Damage premium. It does not mean the same percentage is deducted from every component of your motor insurance premium.

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It can grow over time

The standard NCB scale increases with consecutive claim-free years, subject to applicable policy conditions.

How does NCB increase?

The standard scale reflected in IRDAI-hosted motor policy wordings reaches up to 50% after five consecutive claim-free years. :contentReference[oaicite:2]{index=2}

1 year
20%
2 years
25%
3 years
35%
4 years
45%
5 years
50%

The biggest NCB mistake: thinking it discounts the whole premium.

NCB applies to Own Damage The discount is linked to the Own Damage premium rather than the entire motor insurance premium. :contentReference[oaicite:3]{index=3}
Third-party premium is different NCB should not be understood as a discount on the third-party liability component.
Add-ons are separate The effect of NCB should not be confused with the cost of optional add-ons selected with the policy.
Your renewal premium can still change Even with NCB, the total amount payable at renewal can change because different components of the premium may vary.

What happens to your NCB after a claim?

This is where many car owners get confused. NCB eligibility is linked to the claim history for the relevant policy period. A claim can affect the NCB available at the next renewal, subject to the applicable policy terms.

Before making a small claim, think beyond the repair bill.

For a minor loss, it may be worth comparing the immediate benefit of making a claim with the possible effect on your future NCB. The right decision depends on the circumstances, policy conditions and actual repair cost.

Can you take your NCB to another car or insurer?

NCB is associated with the insured's eligibility rather than simply being attached permanently to one particular vehicle. IRDAI-hosted policy wording also provides for carrying the applicable NCB when transferring insurance to another insurer, subject to evidence of entitlement and applicable conditions. :contentReference[oaicite:4]{index=4}

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Changing insurers?

Your earned NCB can generally be carried over when moving from one insurer to another, subject to the insurer's verification and policy requirements.

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Changing your car?

NCB follows the eligible insured's entitlement rather than simply remaining tied to the old vehicle, subject to applicable rules and documentation.

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Keep your proof

Your renewal notice or a letter confirming your NCB entitlement may be used as evidence when transferring the benefit.

NCB myths worth clearing up

MYTH 01

"NCB means my whole premium gets 50% off."

Not exactly. NCB is a discount on the Own Damage premium, not the entire motor insurance premium. :contentReference[oaicite:5]{index=5}

MYTH 02

"NCB is only useful if I never change my car."

NCB can generally be transferred subject to applicable conditions and proof of entitlement.

MYTH 03

"NCB is the same as NCB Protection."

No. NCB is the earned discount. NCB Protection is a separate add-on designed to preserve the bonus in specified situations.

MYTH 04

"Every small repair should automatically be claimed."

Not necessarily. For smaller losses, consider the claim amount, deductible, policy terms and potential NCB impact before deciding.

No Claim Bonus — FAQs

No Claim Bonus, or NCB, is a discount available at renewal for eligible claim-free insurance periods. It is applied to the Own Damage premium, subject to policy conditions.
The standard progression reflected in IRDAI-hosted motor policy wordings is 20% after one claim-free year, 25% after two, 35% after three, 45% after four and 50% after five consecutive claim-free years. :contentReference[oaicite:6]{index=6}
No. NCB is a discount on the Own Damage portion of the premium. It should not be treated as a discount on the entire motor insurance premium.
The effect depends on whether a claim is made and on the applicable policy terms. A claim can affect the NCB available at the following renewal.
Yes, applicable NCB can generally be carried when moving insurance from one insurer to another, subject to evidence of entitlement and the receiving insurer's requirements. IRDAI-hosted policy wording specifically provides for this transfer. :contentReference[oaicite:7]{index=7}
NCB Protection is a separate add-on offered by insurers under specified policy terms. It is designed to preserve the earned NCB in certain claim situations. The exact number of claims and conditions depend on the specific product.
NCB is associated with the Own Damage section of motor insurance. A standalone third-party liability policy does not provide an Own Damage premium on which NCB can be applied.
NCB eligibility can be affected if the policy is not renewed within the applicable period. Older IRDAI-hosted policy wordings specify renewal within 90 days for NCB eligibility; always check the current terms applicable to your policy. :contentReference[oaicite:8]{index=8}

Your claim-free years have value. Don't lose track of them.

Before renewing your motor insurance, check your NCB, Own Damage premium, add-ons, IDV and coverage requirements.

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