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NCB (No Claim Bonus) and Its Benefits


What is NCB and under what circumstances is it applicable and how does it benefit the vehicle owner?

NCB is the short form of No Claim Bonus; it is rewarded to the owner of the vehicle who is also the policy holder for No Claim / Claims in the previous policy year. It can be accumulated over a period of time

If you have NCB you can avail a discount ranging from 20-50% on the Own Damage Premium.

NCB rewards you for being a good driver and helps you save on your motor insurance. The chart here illustrates the discount on Own Damage Premium on account of no claims for the consecutive years.

20% discount on OD Premium
No claim made or pending during the preceding full year of insurance
25% discount on OD Premium
No claim made or pending during the preceding 2 consecutive years of insurance
35% discount on OD Premium
No claim made or pending during the preceding 3 consecutive years of insurance
45% discount on OD Premium
No claim made or pending during the preceding 4 consecutive years of insurance
50% discount on OD Premium
No claim made or pending during the preceding 5 consecutive years of insurance

Newspaper-cutting(Article authored by Vijay Kumar, Head – Motor Claims at Bajaj Allianz; published in Financial Chronicle)
Click on the image above to read the full article


How does NCB affect my premium?

The No Claim Bonus is a great way to progressively reduce your premium.

For example, the below table shows the premium payable towards a Maruti Wagon R costing Rs.3.6 lakh, over six years in following scenarios:

  • Scenario 1: When no claim is made and the No Claim Bonus is earned, as applicable
  • Scenario 2: When a claim is made every year
Scenario 1 (With NCB)
Scenario 2 (Without NCB)
Value in Rs.
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 180000 50 2,814 0 8,443

If you are carrying forward a No Claim Bonus on any vehicle, you can get it transferred to a new vehicle of the same type (four-wheeler to four-wheeler, two-wheeler to two-wheeler). This way, you can slash between 20% and 50% on the first premium payable (when it is the highest) on your new vehicle.

Example: you buy a new Honda City, costing Rs.7.7 lakh. In normal circumstances, the Own Damage Premium payable towards its insurance for the first year would be Rs.25,279. However, if you were to transfer the 50% No Claim Bonus (the best case scenario) on your old vehicle to the Honda City, you would pay Rs.12,639 as Own Damage Premium in the first year a 50% saving.


Can my No Claim Bonus be forfeited? If yes, then why?

Your NCB will be forfeited in the following cases only:

  • If the claim is made during a policy period you will not be eligible for any NCB in the corresponding year.
  • If there is a break in the insurance period for more than 90 days, i.e. if you do not insure within 90 days of the date of expiry on your existing policy.


Can I transfer the NCB from an old vehicle to a new vehicle?

You can transfer the NCB from your old vehicle to a new one for the same class and type of vehicle. To transfer, keep the following in mind:

  • When you sell your old vehicle ensure that ownership is transferred and make a photocopy of the new entry in the RC book for insurance purposes.
  • Obtain the NCB certificate. Forward a copy of the delivery note to your insurance company and ask for the NCB certificate or holding letter. This letter is valid for three years.
  • When you buy a new vehicle get the NCB transferred to your new vehicle policy.


Please note

* NCB becomes Nil in case of a claim
* NCB follows the fortune of the customer and not the vehicle
* NCB can be transferred to the new vehicle in case of substitution of vehicle of the same class
* Validity – 90 days from the date of expiry of the policy
* NCB can be utilized within 3 years (where the existing vehicle is sold and a new vehicle is purchased)
* NCB recovery can be done in case of a name transfer


To learn more about Bajaj Allianz Car Insuranceclick here!

To know more about how NCB can help you, click here!

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Published on:19 Apr, 2011

By: | Tags: , , , , | Comments: 142


142 thoughts on “NCB (No Claim Bonus) and Its Benefits

  1. Pingback: monster dr dre

    • CFU

      Dear Sir,

      We request you kindly provide the policy number and updated contact number so that we can check the detail and do the needful.

      Thanks for writing to us.

      Thanks and Regards,
      Help and Support Team

  2. Rameshkumar

    I bought a 2nd hand car. I am second owner of the car.
    I am going to insure the car with my name.
    Is possible to transfer previous owner NCB to my new insurance?


    • CFU

      Dear Ramesh,We want to inform you that,it is not possible to to transfer the NCB of the previous owner in your name.

      Thanks & Regards,

      Help & Support Team.

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