ms-ncb-no-claim bonus india insurance

What is NCB or No claim bonus in insurance in India

NCB or No claim Bonus is the bonus you receive on your purchase of next insurance policy if you do not make a claim for the current year on the current insurance policy. NCB is a way for insurers to thank good drivers. As practised in other countries, insurers in India also offer NCB and you can use it to get a discount on your “own damage premium” for next purchase.

How is No Claim Bonus calculated

NCB starts with 20% and increments every year of non claims up to a max of 50%. However you can loose your NCB if you are not insured for your vehicle based on various terms and conditions.

NCB is only applicable to the own damage component of the policy and not the complete premium you may have with other add-ons

No Claim Bonus (NCB) for Car in India

NCB starts with 0% and ends at 50%.
The discount on the own damage premium is as below.

If you complete :

  • one year of no claims on your insurance policy: 20%
  • two consecutive years of no claims : 25%
  • three consecutive years of no claims :35%
  • four consecutive years of no claims : 45%
  • five consecutive years of no claims : 50%

Let’s understand this with an example. So, say if you were to insure your car with IDV or Insured declared value of 8 lakh rupees and the own damage premium is ₹ 24,000.00

[Also read: What is IDV or all about car insurance in India.]

In case of no NCB, the premium you pay will include own damage of 24,000.00 However, if way you had NCB 50% (For not claiming at all for five years and meeting all terms and conditions) , you have to pay only ₹ 12,000.00 towards own damage premium.

NCB for Two wheelers in India

NCB or No claim bonus discount for two wheelers or bikes in India follows the same percentages as car.

So the NCB on bike starts with 20% discount up to a max of 50% discount on the own damage component of your renewal premium.

Just a fun fact, not all countries honour the same discount for car and bikes. For e.g., In Singapore the car NCD (Singapore refers to it as NCD than NCB) is 0 to 50% , however for two wheelers or bike is 0 to 20% max.

Can I apply No Claim Bonus to third party insurance policy

NCB in India only discounts the own damage cover. Third party only insurance cover does not include the own damage component. Hence, NCB is not applicable to third party insurance policy in India.

Is NCB attached to car or bike or to a person

The NCB or no claim bonus is attached to you as a policyholder and not the car or the bike. That means, if you change your vehicle, it is perfectly fine as you can still enjoy the benefits of your NCB.

However you can only have your NCB attached to only vehicle at a time. Which means , if you own another vehicle, you build another set of NCB on your name for a second vehicle.

Can you transfer your No Claim Bonus or NCB?

Yes, your NCB can be transferred from one insurer to another. Also you can transfer your NCB from one vehicle to another if you end up purchasing a new one as it is attached to the policyholder than the insured vehicle.

How do I transfer my NCB from old vehicle to new vehicle

As the existing NCB can only be attached to one vehicle at a time, you can transfer your NCB from old car or bike to new car or bike if you have sold the old one.

In order to transfer the NCB to new vehicle you need copies of the below documents.

  • The delivery note from sale of your old vehicle
  • Insurance policy of the old vehicle
  • Booking form of new vehicle

How do I transfer my NCB from one insurer to other insurer

If you are switching insurers, the NCB can easily be enjoyed with other insurer.
A NCB certificate from the existing insurer will do the job of certifying your existing NCB. You can contact your existing insurer for the NCB certificate copy.

If there are some disputes on the claimed NCB, some insurers will also require a self undertaken copy of your NCB declaration. Insurers in India are regulated by IRDA and have to make sure the practices are as per the rules and guidelines.

Can I apply NCB on two vehicles

Policyholder of the insurance is the actual NCB owner. However according to the rules NCB is only applicable on one vehicle insurance policy at a time

This means if you do have a second vehicle, you have to build your separate set of NCB for second car. You can however transfer your NCB from one vehicle to other provided you have sold one of them.

Under what conditions can I loose NCB

NCB can be lost and will not be available to you based on certain terms and conditions. One can loose his or her NCB on the below conditions.

  1. You made a claim : Once you make a claim towards the non third party component of your policy the NCB is reseted. This could either be a resolved or even a pending claim in the books and does impact your NCB during renewal.
  2. If you do not own an insurance policy after the expiry of your proof of NCB which is two years.

Can I transfer my No Claim Bonus or NCB from overseas.

If you have been driving outside India with a valid driving license and owned and maintained a good NCB or NCD, the insurers in India may consider your No Claim Bonus. However, you will have to produce a document from your existing overseas insurer. Please check with various insurers in India on the acceptance of the foreign NCB.

How to check my NCB on car or bike

If you have not been riding or driving and own no insurance policy chances are your NCB is 0%. However if you do have an exiting insurance policy and have not made any claims then your NCB should be as per the calculated percentages.

You can always check with your current insurer for your latest NCB and also request for a NCB certificate copy.

What will happen to my NCB if my car or bike is stolen

If you car or bike is stolen, and you do make a claim, your insurer can not claim the expenses from any third party. If you make a claim for theft , the NCB will be impacted and reduced or reseted.

What is NCB protection?

NCB protection is an extra add on or an optional benefit offered by insurers to protect your NCB from depreciating. So say, if you have 50% NCB, you might want to purchase a protection towards loosing it.

Your NCB will not reduce based on the terms and conditions in your policy document, even in an event of claim, if you happen to have NCB protection.

The number of claims that can be made with NCB protection without loosing your NCB are limited and specified in the policy documents.

Some insurers sell packaged NCB protection with extra benefits . These extra benefits include examples like for -life protection on NCB or no reduction on multiple claims and renewals. However, these conditions will be honoured, as long as you are with them during renewal. If you switch insurers, the new one may not honour the protection if some of the protection clauses are only available at the previous insurer. Hence it is worth reading the fine prints to understand the clauses of NCB protection.

If you have a very good record of no claims and can enjoy about 50% of discount, NCB protection may be worth it.

Common FAQs on NCB

Below are few commons FAQs regarding NCB or No claim bonus.

What is the range of discount of NCB or No claim bonus ?

NCB ranges from 20% to 50% max in India.

Are car and bike or two-wheeler NCB the same ?

Yes. Both bike and car NCB range from 20% to 50% max.

Can you apply your NCB on insurances for two vehicles ?

No. Even though NCB is attached to policyholder, NCB or no claim bonus can only be applied to one vehicle. You will have to build separate NCB for other vehicle.

Can NCB or No claim bonus be transferred ?

Yes, NCB can be transferred from you old ‘sold’ vehicle to new one.

Can NCB be applied to all types of vehicle insurance plan?

No, since NCB discounts only the own damage component of your premium, it is not applicable on Third party only vehicle insurance plans.

Hopefully, you now know the concept , meaning and benefits of NCB in insurance in India. We hope you are more closer to making a well informed purchase of your next insurance.