No Claim Bonus (NCB) In Car Insurance: 5 Essential Things Every Policyholder Should Know

Every car owner is required to have car insurance. The policyholder pays a certain amount each month. In exchange, if there is an accident, the insurance company pays for all the costs due to it. Rules in the insurance contract say the user must make a claim. A No-Claim Bonus (NCB) is a unique offer from car insurance companies.

Policyholders are paid for not claiming in the previous years. People who own policies and don’t make any claims can get a 20 to 50% refund on their rates. But people getting their first auto insurance coverage for their first car don’t get an NCB rate because it’s their first time buying auto insurance. If there have been no claims in the past year, you can get a 20% NCB when you renew your insurance for the first time.

Policyholders usually know about NCB but sometimes need help understanding how it works, which can make them unhappy. Because they need to learn more about NCB, they often don’t get all its benefits. This blog post will discuss some NCB terms that consumers should know.

How NCB Works

If you have car insurance and haven’t made any claims during the policy term, you may be qualified for a Claim Bonus. Every car owner needs to know how NCB works to save as much money as possible on their insurance rates. Here is a complete description of how NCB works:

Earning NCB:

  • If a policyholder doesn’t claim for a year, they get NCB. The idea is simple: your NCB percentage goes up as time goes on without you making a claim.
  • NCB usually starts at a small amount, generally around 20%, for the first year without a claim and slowly rises yearly.
  • Some insurance companies offer enhanced NCB, meaning customers can get a more significant share of NCB each year they don’t make a claim.

Accumulating NCB:

  • Over the years, NCB can add up and significantly save insurance rates. For example, after five years of not making a claim, customers can get NCB savings of up to 50% or more.
  • Incentives for customers to keep their claims record clean and support responsible driving are both NCB.

NCB Redemption:

  • When a policyholder’s insurance is renewed, they can cash in their NCB to get a discount on their payment.
  • The NCB discount is taken from the annual payment, lowering the policyholder’s total insurance cost.
  • It is essential to know that NCB savings only apply to the insurance’s “own damage” part, not the “third-party liability” part.

Retention Of NCB:

  • If clients change insurers, they can keep the NCB they’ve earned as long as they can show proof from their old insurance that they are entitled to it.
  • NCB retention ensures customers aren’t charged extra for switching insurance and can keep getting discounts for years without making a claim.

Here are the five things every automobile owner should know about the NCB:

NCB Amount

The NCB that auto insurance companies offer is between 20% and 50%. A 20% bonus is given to the insured if he doesn’t make any claims in the first year of his insurance. If the insured does not claim for two years in a row, the NCB goes up to 25%. Similarly, the insured is given a 35% bonus after three years with no claims.

A 45 percent bonus is given to policyholders who go four years without making a claim. After five years of not making a claim, the insured would be given a fifty percent bonus. If the insured claims in any given year, they will not get the NCB bonus when they get insurance again.

Forego Modest Claim Amounts

Before filing a claim with their insurance company, policyholders should consider how much money they will get back. Then, they should compare this amount to the bonus they will get if they don’t file the claim.

The extra Rs 5,000 should always be taken instead of the Rs 3000 claim amount. In this case, consumers should pay the Rs 3000 claim amount out of their pocket and get the bonus from the company since it is more than the claim amount.

NCB Is Applicable When Switching Insurance

Additionally, NCB is given even if you change your insurance company. If a customer had car insurance from Tata AIG for the first two years, moved to ICICI in the third year, and made no claims, then the ICICI motor insurance company should give him an NCB of 25%.

NCB Applies To Policyholders, Not To Their Vehicles

Policyholders are given NCB as a gift, not their cars. So, if an insured sells his old car after three years and buys a new one, and he has yet to make any claims during that time, his old NCB will apply to the new insurance policy he gets for the new car.

Non-credit Bonus For Third-party Coverage

NCB is not available on third-party car insurance; this savings only applies to the damaged part of your price. People who only have third-party car insurance cannot get the NCB supplement.


Being alert on the road is only part of good driving. You must also protect yourself from other drivers who aren’t paying attention. Car insurance companies also appreciate your hard work and will give you NCB security cover as a prize.NCB is one of the best ways to raise your car insurance, and as we already talked about, it can increase your insurance amount by up to 50%. All this happened because I was a little more careful on the road.

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