For every claim-free year you complete, your insurer rewards you with a discount on your renewal premium. That discount is called No Claim Bonus, or NCB. It typically starts at 20% in year one and can climb up to 50% in year five. Used well, it is one of the biggest legal ways to lower your car insurance cost without changing your policy structure or cutting coverage.

Yet many car owners do not know how NCB works, how to transfer it when switching insurers, what happens to it after a claim, or whether they should pay extra for an NCB protect add-on. Insurers often lose their hard-earned bonus by filing a small claim, while others fail to transfer their NCB to a new car and pay the full premium for a year. This guide explains everything you need to know about NCB in car insurance, including the official slab table, how to transfer NCB across insurers and cars, what the NCB certificate is and the rules that reset NCB after a claim.

What is NCB in Car Insurance?

NCB stands for No Claim Bonus. It is a discount given by your insurer on the own damage portion of your car insurance premium when you do not make a claim in the previous policy year.

The NCB meaning is simple. Each claim-free year proves that you are a low-risk driver. The insurer thanks you with a percentage discount on your next renewal. The longer you go claim-free, the higher the discount, up to a maximum of 50%.

A few important NCB rules to remember:

• NCB applies only to the own damage portion of your premium. The third-party portion is fixed by IRDAI and does not change.
• NCB belongs to you, not your car. If you sell your car and buy a new one, the NCB moves with you. The new car's policy gets the discount, not the old car's next owner.
• NCB starts after the first claim-free year. A brand-new car or a fresh policy does not start with an NCB. You earn it one year at a time.

• NCB applies even when you change insurers. You do not lose the discount by switching companies, as long as you have an NCB certificate or proof.

   

NCB Slab Table

Here is the official NCB slab table used by every general insurer in India. The NCB slabs are uniform across the industry, regardless of which insurer you choose or which car you drive.

The 50% slab is the maximum. Even if you stay claim-free for ten years, the discount remains at 50%. So the NCB maximum discount tops out at five claim-free years.

These NCB slabs are not negotiable. Every insurer applies the same percentages. The only difference is how each insurer calculates the base own damage premium on which the NCB slabs are applied. So when you transfer NCB from the old insurer to the new insurer at renewal, the slab carries over, but the rupee value of the discount may change slightly based on the new own damage premium.

How NCB Reduces Your Premium: A Real Life Example

Numbers make the NCB discount easier to grasp. Let us walk through a real example using a Hyundai Creta with an own damage premium of Rs 10,000.

• Year 1 (new policy, no NCB): Premium Rs 10,000
• Year 2 (after 1 claim-free year, 20% NCB): Premium Rs 8,000
• Year 3 (after 2 claim-free years, 25% NCB): Premium Rs 7,500
• Year 4 (after 3 claim-free years, 35% NCB): Premium Rs 6,500
• Year 5 (after 4 claim-free years, 45% NCB): Premium Rs 5,500
• Year 6 (after 5 claim-free years, 50% NCB): Premium Rs 5,000

Over six years, you save more than Rs 17,500 on the own damage portion alone. That is real money saved simply by avoiding claims and renewing on time. This is also why one small claim hurts so much when the NCB is so high. Make an Rs 8,000 claim and your 50% NCB resets to zero. You lose your Rs 5,000 discount and have to pay the full Rs 10,000 base premium. Over five years, you may lose Rs 17,500 just to recover that Rs 8,000 claim.

How to Transfer NCB When Switching Insurer

Since NCB is portable, you can take it with you when you switch insurers. The process is straightforward. Most people search how to transfer NCB to new insurer when they shop for a better quote at renewal. Here is the simple way to do the same:

• Get a quote from the new insurer. Mention your existing NCB percentage during the quote process.

• Request an NCB certificate from your current insurer. You can call their helpline, email customer care, or use their app. The certificate is issued free of cost.

• Submit the NCB certificate to the new insurer. They verify it through the IIB (Insurance Information Bureau) database before applying the discount.

• The new policy is issued with your NCB already applied. The renewal premium reflects the discount.

The entire transfer takes one to two working days. The NCB transfer process is now completed digitally on most insurer apps and aggregator platforms. If you forget to request the certificate, you can also share your previous policy document. The new insurer can usually verify your NCB from it.

NCB Certificate: What It Is and How to Get One

An NCB certificate is the official document that proves your NCB entitlement. It mentions your NCB percentage, the policy number, and the last claim-free year date. Insurers use it to confirm your eligibility before applying the discount on a new policy.

You will need an NCB certificate in three situations.

• When you sell your old car and want to transfer the NCB to a new car
• When you switch insurers at renewal and need to prove your existing NCB
• When there is a gap of more than 90 days between two policies

To get one, contact your existing insurer. Most insurers issue the certificate via email within 24 hours, with no fee involved. The NCB once issued certificate is typically valid for three years from the date of issue.

What Happens to NCB If You Claim?

This is the single most important rule about NCB that insurance holders must remember. A single claim resets your NCB to zero on the next renewal, no matter how high your slab was.

If you are at the 50% NCB slab and make even a small claim, your next renewal starts at 0% NCB. You will have to build it up again from year one. However, there are two exceptions to this rule.:

The NCB Protect Add-on. If you have an NCB protect add-on on your policy, your NCB is protected even after one or two claims, depending on the insurer's terms. In such cases, even after the claim, the NCB does not reset to zero.

Glass Repair Claims. Some insurers do not deduct NCB for windscreen replacement claims if handled separately. Always check your policy wording.

The NCB reset after claim rule is the reason experienced car owners skip small claims. The math is simple. If the claim amount is less than the NCB, you will lose over five years, pay out of pocket and protect the bonus.

NCB Protect Add-on: Is It Worth It?

The NCB protect add-on is one of the cheapest yet most useful add-ons in the market. At Rs 200 to Rs 700 per year, it lets you make one or two claims per year without losing your NCB.

The exact rules, however, may vary by insurer:

• Some insurers protect NCB after the first claim only
• Others allow two claims per year before NCB resets
• A few cap the claim amount under which NCB protection applies

The add-on becomes valuable once you cross the 25% NCB slab. At 35% and above, the cost of losing NCB outweighs the small annual add-on cost in almost every case. If you are in your first or second year of a new car, NCB protection can wait. But for cars in year three or beyond, this add-on is a smart choice.

Common NCB Myths Busted

Several myths about NCB confuse car owners every year. Here is clearing the most common ones:

Myth 1: NCB applies to the entire premium.

Reality: False. NCB applies only to the own damage portion, not the third-party portion or add-on premiums.

Myth 2: NCB stays with the car when sold.

Reality: False. NCB belongs to the policyholder, not the car. When you sell your car, your NCB stays with you and can be transferred to your next car.

Myth 3: One claim only reduces NCB by one slab.

Reality: False. Any claim, regardless of size, resets NCB to zero unless you have the NCB protect add-on.

Myth 4: NCB is automatically transferred at renewal.

Reality: Mostly false. While the NCB transfer process is simple, you still need to mention it during the quote or submit the NCB certificate to the new insurer.

Myth 5: NCB can be transferred to another person.

Reality: False. NCB cannot be transferred between people. It stays with the original policyholder, unless in death claims, where the policy is transferred to the legal heir, along with accumulated NCB.

Myth 6: Third-party only policies earn NCB.

Reality: False. NCB applies only to comprehensive policies and standalone own damage policies. Pure third-party plans do not earn NCB.

Leveraging NCB in Your Insurance

The no claim bonus is one of the most valuable but least understood features of car insurance in India. Used smartly, it can save you tens of thousands of rupees over the life of your car.

The thumb rules are simple. Avoid small claims that are not worth the lost NCB. Renew on time to keep the bonus alive. Transfer your NCB whenever you change cars or insurers. And consider the NCB protect add-on once you cross the 25% slab.

Note: This article has been vetted by Siddarth Khandelwal, an Insurance expert at Insure24.

FAQs

Q. What is NCB in car insurance?

NCB, or No Claim Bonus, is a reward offered by insurers for every claim-free policy year. It is provided as a discount on the own damage premium during renewal. The discount starts at 20% after the first claim-free year and can gradually increase up to 50% after multiple consecutive claim-free years.

Q. How to transfer NCB to new insurer?

To transfer your NCB to a new insurer, you need to obtain an NCB certificate from your existing insurance company at the time of renewal or policy cancellation. Submit this certificate to the new insurer while purchasing the policy. After verification, the new insurer applies the eligible NCB discount to your own damage premium.

Q. What happens to NCB if I make a claim?

If you make a claim during the policy period, your accumulated No Claim Bonus usually resets to zero at the next renewal. This means you lose the discount earned through previous claim-free years. However, if your policy includes an NCB protection add-on, you may still retain part or all of the bonus despite making eligible claims.

Q. Can I transfer NCB to another person?

No, the No Claim Bonus cannot be transferred from one individual to another because it is linked to the policyholder and not the insured vehicle. Even if you sell your car, the NCB remains with you. The new owner must purchase a separate insurance policy without using your accumulated NCB benefits.

Q. NCB valid for how many days after policy expiry?

In India, the No Claim Bonus generally remains valid for up to 90 days after your car insurance policy expires. If you renew your policy within this period, you can retain and continue using your accumulated NCB. However, if the renewal is delayed beyond 90 days, the insurer may cancel the accumulated bonus completely.

Q. Is NCB transferable between cars?

Yes, the No Claim Bonus is transferable from one car to another because it belongs to the policyholder rather than the vehicle itself. When you sell your old car and buy a new one, you can carry forward the earned NCB by submitting the required documents and NCB certificate to the insurer during policy issuance.

Q. Does NCB apply to third-party premiums?

No, the No Claim Bonus does not apply to the third-party insurance premium. NCB is available only on the own damage component of your car insurance policy. Since third-party premiums are fixed by the Insurance Regulatory and Development Authority of India (IRDAI), insurers cannot offer any NCB-related discount on that portion of the premium.

Q. How is NCB calculated?

NCB is calculated based on the number of consecutive claim-free years completed by the policyholder. The discount follows a standard slab structure used across the insurance industry. Typically, it starts at 20% after one claim-free year and gradually increases to a maximum of 50% after five continuous claim-free renewals without interruption or claims.

Q. Can I use NCB on a new car bought after selling the old one?

Yes, you can use the accumulated No Claim Bonus on the insurance policy of a newly purchased car after selling your old vehicle. To do this, obtain an NCB retention or transfer certificate from your previous insurer and submit it to the insurer issuing the new car policy for discount application purposes.

Q. Does the NCB protect add-on cover all claims?

No, the NCB protection add-on does not usually protect against unlimited claims. Most insurers allow only one or two claims in a policy year while still preserving the No Claim Bonus. Some insurers may also impose restrictions on claim amount limits, claim types, or repair conditions before continuing the NCB protection benefit at renewal.