All you ever wanted to know about No Claim Bonus (NCB) on your Car Insurance


What is NCB?

  • No claim bonus is the benefit one gets in the form of a discount on the premium to be paid in the following year if one does not claim insurance during the preceding year of the cover.
  • NCB rate is generally 20 % in the second year and it can go up to 50 % in the sixth year. NCB rates are more or less the same across all insurers.


How to save on your Insurance Premium when buying a new car and selling an old one?

  • By not claiming on small damages: There is a trade-off that one needs to make when deciding on whether to use insurance when getting damage repaired. If the estimate of car repair is less than the NCB which one will get at the end of the policy tenure, then one should not use the insurance and should pay up for the damages. Also while taking this decision one assumes that the car will not get damaged in the same year again and one will not have to use the insurance till it is renewed and its NCB is received.
  • While transferring insurance from old car to new car: One can save a lot on car insurance when you sell your old car and buy a new one. No Claim Bonus (NCB) on your Car Insurance can be transferred from your old car to your new car.
    • After transferring the ownership of the old vehicle get a copy of the updated RC book/card with the name of the new owner on it for further processing.
    • Contact your insurance agent or the insurance company office of the old car. Forward the copy of updated RC book, transfer papers and policy copy of the old car to them & ask for NCB certificate or holding letter.
    • The validity of this NCB certificate / holding letter is for 3 years.
    • Now forward this NCB certificate to your car dealer from where you are buying the new car or their insurance agent & you will get a considerable discount on the new car insurance premium.
  • It’s not such a great hassle in getting the NCB transferred from your old car to the new car and you get a considerable amount of benefit for this effort. Insurance representatives may or may not tell you about this NCB transfer process but if you insist then they will definitely help you in getting this done.

So keep these tips in mind the next time you buy or transfer or make claims on your insurance.Happy Saving!