🚗 Motor Insurance NCB (No Claim Bonus): Complete Guide 2025
Last Updated: November 2025
🧾 What is NCB (No Claim Bonus)?
No Claim Bonus (NCB) is a reward given by motor insurance companies to policyholders who don’t make any claims during the policy period. It offers a discount on the Own Damage (OD) portion of your premium during renewal.
In simple words: If you drive safely and don’t claim insurance, your insurer rewards you with a discount on your next premium.
💰 NCB Discount Structure (Year-wise)
| Policy Year (No Claim) | Discount on OD Premium |
|---|---|
| 1 year | 20% |
| 2 consecutive years | 25% |
| 3 consecutive years | 35% |
| 4 consecutive years | 45% |
| 5 consecutive years or more | 50% (Maximum) |
Example: If your car’s OD premium is ₹10,000 and you have 50% NCB, you’ll pay only ₹5,000 next year for that part.
⚙️ How NCB Works
- You earn NCB for every claim-free year.
- Making even one claim resets NCB to zero.
- NCB belongs to the policyholder, not the vehicle.
- You can transfer NCB to a new car or insurer.
📜 How to Transfer NCB
- Ask your previous insurer for an NCB retention/transfer letter.
- Provide it to your new insurer when buying or renewing.
- The discount will be verified and applied.
✅ Tip: Keep your old policy and renewal notice as proof.
🚫 When You Lose NCB
- If you make a claim (any amount).
- If your policy isn’t renewed within 90 days of expiry.
- If vehicle ownership changes (without transfer of NCB rights).
🛡️ NCB Protection Add-on
This optional cover protects your NCB even after a small claim. It’s useful for expensive cars or long claim-free records.
Example: You have 50% NCB and claim for a minor mirror break. With this add-on, your NCB remains at 50% next year.
🔍 Key Points to Remember
- NCB applies only on Own Damage premium.
- Maximum benefit is 50%.
- Can be transferred between insurers or vehicles.
- Renew within 90 days to retain NCB.
🧠 Example Scenario
| Situation | NCB Impact |
|---|---|
| No claim for 3 years | 35% discount |
| Minor claim in 4th year | NCB resets to 0% |
| With NCB protection add-on | NCB remains 35% |
🏁 Conclusion
No Claim Bonus (NCB) encourages responsible driving and helps you save up to 50% on your premium. Drive carefully, renew on time, and consider NCB protection for long-term savings.
📌 FAQs on Motor NCB
1️⃣ Is NCB applicable on third-party insurance?
❌ No, it applies only on the own-damage component.
2️⃣ Can I transfer NCB to another person?
Only if both vehicles are in the same owner’s name or in case of inheritance.
3️⃣ Does NCB apply to commercial vehicles?
✅ Yes, NCB is applicable for both private and commercial vehicles.
4️⃣ Can I use NCB on two vehicles at once?
❌ No, one NCB can be used for one active policy only.
© 2025 Motor Insurance Guide | Updated by Sanjeev Kumar
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