You’ve driven safely all year, avoided accidents, and never filed an insurance claim. When it’s time to renew your policy, your insurer rewards you with a discount—just for being a careful driver! This reward is called NCB (No Claim Bonus), and it’s one of the best perks of motor insurance. In this guide, we’ll explain what is NCB in insurance, how it works for car and bike owners, and how to maximize your savings.
NCB Full Form & Meaning
NCB stands for No Claim Bonus. It’s a discount on your insurance premium that you earn for not making any claims during the policy period. Think of it as a “thank you” from your insurer for being a responsible driver.
Here’s how it works:
- If you don’t file a claim in a year, you earn an NCB discount at renewal.
- The discount increases every claim-free year, up to a maximum limit.
- NCB applies to car insurance, bike insurance, and most vehicle insurance policies.
How NCB Works: The Simple Math
NCB is a percentage-based discount on your insurance premium. The longer you go without claims, the bigger the reward. Here’s the standard NCB structure in India (as per IRDAI guidelines):
| Claim-Free Years | NCB Discount |
|---|---|
| 1 year | 20% |
| 2 years | 25% |
| 3 years | 35% |
| 4 years | 45% |
| 5+ years | 50% |
Example:
- Your car insurance premium is ₹10,000.
- After 3 claim-free years, your NCB is 35%.
- You save ₹3,500 (35% of ₹10,000) on renewal.
Why NCB Matters
- Save Money: NCB cuts your premium by up to 50% over time.
- Reward for Safe Driving: It incentivizes careful driving habits.
- Transferable: NCB stays with you, not your vehicle. Switch bikes/cars or insurers? Take your NCB along!
- Boosts Resale Value: A high NCB shows your vehicle was well-maintained.
How NCB Applies to Car & Bike Insurance
While the NCB meaning is the same for all vehicles, here’s how it plays out:
NCB in Car Insurance
- Applies to the “own damage” part of your premium.
- Even if you switch insurers, your NCB stays valid.
- Lost due to any claim (even small ones like windshield repair).
NCB in Bike Insurance
- Works similarly to car insurance.
- Discounts apply to comprehensive or standalone own-damage policies.
- If you sell your bike, you can transfer NCB to your new bike.
How to Protect Your NCB
Losing your NCB over a minor claim can hurt. Follow these tips to keep your discount safe:
- Avoid Small Claims:
Pay for minor repairs (like scratches or dents) out of pocket instead of claiming insurance. - Use Add-Ons:
Opt for zero depreciation cover or engine protector to reduce out-of-pocket costs for repairs. - Renew On Time:
A policy lapse resets your NCB to 0%. Set reminders! - Transfer NCB When Switching Insurers:
Share your NCB certificate with your new insurer to retain the discount.
Common NCB Myths Busted
Myth 1: “NCB is only for comprehensive policies.”
Truth: NCB applies to standalone own-damage plans too.
Myth 2: “A single claim erases all NCB progress.”
Truth: One claim resets NCB to 0%, but you can rebuild it again.
Myth 3: “NCB is linked to the vehicle, not the owner.”
Truth: NCB is tied to you. Sell your car? Keep the NCB for your next vehicle.
FAQs About NCB
Q1. Does NCB apply to third-party insurance?
No. NCB only applies to own-damage coverage (comprehensive or standalone policies).
Q2. What happens if I make a claim?
Your NCB resets to 0% at renewal. For example, if you had a 35% NCB and file a claim, it drops to 0%.
Q3. Can I transfer NCB from a bike to a car?
Yes! NCB is linked to the policyholder, not the vehicle type.
Q4. What if I don’t renew my policy for a year?
Your NCB expires after 90 days of policy lapse. Renew on time to retain it.
How to Check Your NCB Status
- Policy Documents: Your NCB percentage is listed on the renewal notice.
- Insurer’s App/Website: Log in to your account to view details.
- Customer Care: Call your insurer’s helpline with your policy number.
Final Thoughts
Understanding what is NCB in insurance puts you in control of your savings. By driving safely, avoiding small claims, and renewing policies on time, you can unlock up to 50% discounts on premiums. Whether you own a car, bike, or any vehicle, NCB rewards responsibility—and that’s a win-win!
Pro Tip: Always compare NCB benefits when switching insurers. Some companies offer “NCB protection” add-ons to safeguard your discount even after a claim.