Understand no claim bonus car insurance: NCB slabs, rules, when it is lost and how to keep it. Read the simple guide and get a renewal quote with ease.
No Claim Bonus (NCB) is a discount on the own-damage part of your car insurance premium. You earn it for each year you do not make a claim. The discount usually grows from 20% after one claim-free year to 50% after five or more. It belongs to you, not to your car.
How NCB works
Each year without a claim, the insurer rewards you with a discount at renewal. This discount applies to the own-damage premium only. It does not apply to the third-party part.
NCB is a thank-you for safe driving. It also saves you money if you keep a clean record for several years. You can see a short overview on our no claim bonus page.
Usual NCB slabs
These are the usual slabs for claim-free years:
- 1 claim-free year: 20%
- 2 claim-free years: 25%
- 3 claim-free years: 35%
- 4 claim-free years: 45%
- 5 or more claim-free years: 50%
Insurers can have their own terms, so check your policy wording.
Key rules to remember
NCB belongs to the owner, not the vehicle. If you sell your car, the buyer does not get your NCB. You can usually use it on a new vehicle you buy. Our post on transferring insurance and NCB when buying a used vehicle explains this in more detail.
It is lost if you claim. If you make a claim in a year, you usually lose the NCB for that year. This is true even for a small claim.
It does not apply to third-party cover. It only reduces the own-damage premium.
You should renew on time. NCB is usually kept if the policy is renewed on time. Insurers usually allow renewal within about 90 days of expiry to keep NCB. Check your policy for the exact rule.
Long gaps can cost you. After a long gap, NCB may be lost.
What happens when you make a claim
Say you have built up a good NCB slab. Then you make a claim. At the next renewal, you usually lose the discount and start again from the lowest level.
Because of this, think before you claim for very small damage. Sometimes paying a small repair cost yourself is cheaper than losing years of NCB. But if the damage is large, a claim is exactly what the policy is for.
Please do not hide a claim or give wrong facts. Wrong or hidden facts can lead to problems later, including claim rejection.
NCB protection add-on
Some insurers offer an NCB protection add-on. It may let you keep your NCB even after a claim, up to a limit set by the insurer. Terms differ, so check the policy wording.
This add-on may help if you have a high NCB slab and want to protect it. Our guide to car insurance add-ons lists other useful options.
How to build and keep your NCB
- Drive carefully and follow traffic rules.
- Renew your policy on time, before it expires.
- Avoid claims for very small damage, when you can handle the cost.
- Keep proof of your NCB, like your old policy copy.
- Ask about NCB protection if your slab is high.
- Tell your new insurer your NCB when you switch.
If your policy has lapsed, read how to fix it in our post on renewing expired car insurance. To start fresh, visit our renew vehicle insurance page.
Benefits of NCB
- Lower own-damage premium each year
- A reward for safe driving
- It stays with you if you change cars
- It can grow to a good discount over time
Switching insurers with NCB
You can usually take your NCB to a new insurer. You should keep your old policy copy as proof. The new insurer may ask for it. If you sell your car and buy another, the seller can use the NCB on the new vehicle.
Rules differ across insurers, and they can change. The policy document is the final word, so read it before you decide. When you are ready, you can get a quote.
FAQs
What is the maximum NCB?
The usual maximum is 50%, after 5 or more claim-free years. Check your policy wording for your insurer's terms.
Does NCB apply to third-party insurance?
No. NCB applies only to the own-damage part of the premium.
Do I lose NCB if I make a claim?
Usually, yes. A claim in that year means you lose the NCB for the year, unless you have an NCB protection add-on.
Can I transfer NCB to a new car?
Yes, it belongs to you, not the vehicle. You can usually use it on a new vehicle. Keep proof of it handy.
This guide is for information only. Rules and policy terms can change, and the policy document is final. Please read your policy wording.