A No-Claim Bonus (NCB) is essentially a reward you get for not making an insurance claim in a year.

• If you don’t make an insurance claim in a year, it is good news for insurance companies. To reward you, NCB comes into play.

• The insurance companies offer a discount on your premiums for each claim-free year.

• You might think, "What’s the point of accumulating NCB if it’s not transferable?" The good news is that NCB is transferable!

Introduction

People talk a lot about insurance, especially to the younger generation. But once you get insurance, you might wonder—what’s the benefit of paying your premium regularly if you never suffer a loss or make a claim?

The answer lies in the No-Claim Bonus (NCB).

While NCB can apply to multiple types of insurance policies, this article focuses on motor insurance, where it is most commonly used.

What is a No-Claim Bonus?

A No-Claim Bonus (NCB) is a discount given to policyholders for not making a claim during the policy year.

Imagine you’ve purchased an insurance policy and pay a regular premium. Now, if you don’t make any claims, you might feel like you’re spending money without any returns. This is where NCB comes in.

• If you don’t make a claim and have paid all your premiums, insurers reward you with a discount when you renew your policy.

• This discount increases every year if you continue to avoid claims.

• NCB can go up to 50% after five consecutive claim-free years.

• The safer you drive, the less premium you’ll have to pay when renewing your policy.

💡 Important: The NCB belongs to you, not your vehicle. It can be transferred from one vehicle to another if you sell your old car and buy a new one.

NCB Transfer – Can You Transfer Your NCB?

Yes! You can transfer your NCB when you sell your old vehicle and buy a new one.

However, there is a catch—you can only transfer your NCB if you sell your existing car.

To transfer your NCB, you’ll need to provide the following documents to your new insurer:

• Sale deed of your old car

• Original receipt of selling the car

• Confirmation of receipt of the car by the dealer

• Form 29 & Form 30 (buyer-seller agreement form)

• NCB certificate from your previous insurer

• A letter requesting the NCB transfer to your new insurer

🔹 NCB transfer must be done within 90 days of policy expiry.

🔹 The NCB certificate remains valid for three years.

💡 NCB Rules for Different Vehicles:

• NCB earned on a bike cannot be transferred to a car (or vice versa).

• NCB earned on private vehicles cannot be transferred to a commercial vehicle.

• NCB earned abroad can be used in India if the insurance is taken within three years of expiry.

🚗 Buying insurance online? If you’re switching policies digitally, NCB transfer happens through self-declaration, so you don’t need a transfer certificate.

Should You Claim Small Damages or Keep NCB?

If your vehicle gets slightly damaged, think carefully before filing a claim.

• If the repair cost is low, it might be better to pay out of pocket and keep your NCB intact.

• By avoiding small claims, you can preserve your accumulated NCB and get a larger discount on future renewals.

Key Facts About NCB

✅ NCB is for policyholders, not vehicles – If you sell your car, your NCB remains with you and can be transferred to your new vehicle.

✅ NCB is not applicable to third-party insurance – It only applies to comprehensive and own damage policies.

✅ NCB stays valid even if you switch insurers – If you change insurance companies, your accumulated NCB remains valid.

✅ NCB can be protected with add-ons – Some insurers offer NCB Protection Add-Ons that reduce the impact of small claims on your bonus.

Conclusion

Insurance is not just about protecting yourself from future losses—it also rewards you for taking good care of your insured asset.

No-Claim Bonus (NCB) lowers your premium cost and is one of the best ways to reduce your insurance expenses over time. By driving safely and avoiding small claims, you can maximize your NCB and save more on renewals.