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No Claim Bonus (NCB) is a reward or discount offered by car insurance providers for not making a claim during a policy year. This bonus accumulates for up to five years, leading to a substantial discount of up to 50% on the premium for the next year. However, the NCB is nullified if a claim is made within a year.
| Characteristics | Values |
|---|---|
| Full Form | No Claim Bonus |
| Type | A reward or discount |
| Reward Criteria | No claim request during a policy year |
| Reward Range | 20-50% discount on premium payable |
| Reward Applicability | Applicable on renewal of policy |
| Reward Transferability | Transferable to a new vehicle or insurer |
| Reward Calculation | Calculated using a No Claim Bonus calculator |
| Maximum Reward | 50% discount after 5 consecutive claim-free years |
| Reward Validity | Until a claim is made |
| Reward Protection | NCB Protection add-on cover |
What You'll Learn
No Claim Bonus (NCB) is a reward for good drivers
The NCB is a reward for being a good driver and not raising a claim. It is a positive reward, encouraging safe driving and discouraging claims. The better a driver you are, the better it works out for you in the long run.
The NCB is associated with the policyholder and not the vehicle. This means that if you change your car or insurer, you can continue to benefit from the NCB. It can be easily transferred when you change your vehicle or insurer, as long as you shift your policy before the current one expires.
The NCB is a great way to save money on your car insurance. It is a benefit that every car owner would want to take advantage of.
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NCB is transferable to a new car or insurer
NCB, or No Claim Bonus, is a reward or discount offered by car insurance providers for not filing a claim during a policy year. This reward can be accumulated for up to five years, resulting in a discount of up to 50% on the premium upon renewal. The NCB is tied to the policyholder, not the insured car, which means it can be transferred to a new car or a new insurer.
Transferring NCB to a New Car
If you are planning to buy a new car, you can transfer your NCB to the new vehicle. The NCB is tied to the policyholder and not the car, so it can be easily transferred when you change your vehicle. The process to transfer your NCB is simple and hassle-free. The only thing you need to ensure is to shift your policy before your current one expires.
- Contact your old motor insurance provider
- Request an NCB transfer and submit all the required documents
- The insurance company will issue an NCB Certificate
- Submit the NCB Certificate to the new insurance company
- The new insurance insurer will transfer the No Claim Bonus to your new insurer
The following documents are required to transfer NCB offline:
- Transfer application
- Photocopy of the car insurance
- Buyer-seller agreement (Forms 29 & 30)
- Copy of transferring old registration certificate/ ownership transfer certificate (in case of sale of old car)
- Copy of delivery note (in case of sale of old car)
- Copy of the booking receipt (in case of buying a new car)
- No claim bonus certificate
Transferring NCB to a New Insurer
If you are looking to switch your insurance provider at the time of car insurance renewal, you can transfer your NCB to the new insurer. The NCB is tied to the policyholder and not the insurance company, so it can be easily transferred when you change your insurer. The process to transfer your NCB is simple and hassle-free. The only thing you need to ensure is to shift your policy before your current one expires.
- Obtain your NCB Certificate from your previous insurer
- Submit the NCB Certificate to the new insurance company
If you are buying the policy online, you will not need to submit the certificate – your NCB will be transferred based on your declaration. However, this does not mean that you can retract a previously-made claim to avail of an NCB as your new provider can verify this information with your former insurer.
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NCB can be retained with an add-on cover
No Claim Bonus (NCB) is a reward or discount offered by car insurance providers for not claiming during the policy term. This reward can be accumulated for five years to get up to a 50% discount on the renewal premium.
The No Claim Bonus Protect cover is an add-on that helps the policyholder keep their NCB intact even after raising a claim in the policy year. This add-on is highly useful and can be purchased with comprehensive insurance. It is an optional cover but comes with some great benefits.
The NCB Protect cover can be purchased at a nominal premium at the time of new policy purchase or car insurance renewal. By paying a small premium upfront, policyholders can get a huge discount at the time of policy renewal without any fear of making claims.
The reward or discount offered under NCB gets nullified once a policyholder raises a claim. However, with the help of the NCB Protect cover, the policyholder can overcome this issue and keep their discount intact even after raising a claim during a policy year.
Purchasing the NCB Protect cover online is easy and hassle-free. Moreover, if you have missed purchasing the cover at the time of policy purchase, you can still purchase it while renewing your car insurance policy.
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NCB is not applicable to third-party insurance
No Claim Bonus (NCB) is a reward or discount offered by car insurance providers for not claiming during the policy tenure. This reward can be accumulated for five years to get up to a 50% discount on the renewal premium. However, it is important to note that NCB is not applicable to third-party insurance.
Third-party insurance covers the cost of any damage you cause to another person, vehicle, or property. It does not cover any damage to your own vehicle. On the other hand, NCB is a benefit that comes with the own damage premium, which covers the cost of repairing or replacing your vehicle if it is damaged or stolen. This means that if you only have third-party insurance, you will not be able to avail of any NCB discounts, regardless of the number of years your policy has been renewed or if there are any claims.
When you buy a new car insurance policy, you are usually not eligible for an NCB discount on the premium because you have no claim-free record. You can only avail of an NCB starting at a 20% discount on your first policy renewal if there hasn't been any claim during the previous year. This discount then increases by 5% for each subsequent claim-free year, up to a maximum of 50% in the fifth year.
It is also important to note that NCB is linked to the insured person, not the vehicle. This means that if you sell your insured car or buy a new one, you can still retain your NCB as long as you renew your car insurance policies. Additionally, NCB can be transferred from one insurance company to another if you decide to switch insurers.
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NCB is calculated using the number of claim-free years
No Claim Bonus (NCB) is a reward or discount offered by car insurance providers for not claiming during the policy tenure. The NCB is calculated based on the number of consecutive claim-free years. The calculation starts from the second year of the policy period. After the first year, when no claim has been raised, your insurance provider offers you a discount of 20% on the premium amount. This discount increases by 5% each year, up to a maximum of 50% after five consecutive claim-free years.
| Number of Claim-Free Years | NCB Percentage |
| --- | --- |
| 1 | 20% |
| 2 | 25% |
| 3 | 35% |
| 4 | 45% |
| 5 | 50% |
It is important to note that the NCB is calculated only on the own damage component of the premium and not on the third-party component. The own damage component typically makes up a significant portion of the total insurance premium, so the NCB can result in substantial savings over time.
The NCB can be transferred to a new vehicle or a new insurance provider. It is also important to renew the insurance policy before it expires to continue receiving the benefits of the NCB.
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Frequently asked questions
NCB stands for No Claim Bonus. It is a reward or discount offered by car insurance providers for not claiming during the policy tenure. This reward can be accumulated for 5 years to get up to a 50% discount on the renewal premium.
You gain a 20% NCB discount if you haven't made any claims in your first policy year. You then keep gaining an additional 5% for each consecutive year of making no claims.
You can retain your NCB even after filing a claim by opting for an NCB Protection Add-on. This is an optional cover that you can purchase at an additional premium.
