What is NCB in Motor Insurance?

What is NCB in Motor Insurance? Square Insurance - 23 Feb 2022

More and more people in India are driving four-wheeled vehicles. It's important to note that automobile insurance is mandatory in India, and you must get it when you buy a car. But the good news is that most insurance companies offer NCB benefits to their policyholders.

Until recently, most Indians had no idea what the NCB stood for! What is NCB? is one of the most often asked questions, and we're here to help.

NCB is earned throughout a policy's coverage period. It is not a benefit that is automatically included in the policy. An insured must not file any claims during the policy term to be eligible for the NCB. This means that you can only use the NCB once you have renewed your four-wheeler insurance policy for the second time. During a specific year of the policy coverage, you are limited to a certain pre-determined sum.

What is the complete form of NCB?

No Claim Bonus is the NCB abbreviation. Car insurance companies reward their clients who do not submit a claim during a policy year to discount their premiums. In return, the insured receives a discount on their tips for the following policy year when they renew their insurance coverage.

What is NCB in insurance?

NCB stands for No Claim Bonus. It is a discount that insurance companies offer to policyholders who do not make any claims during their policy period. The discount is calculated on the basis of the number of claim-free years that the policyholder has accumulated. The higher the number of claim-free years, the higher the NCB discount. NCB is typically available for all types of insurance policies, including car insurance, bike insurance, and health insurance. However, the specific terms and conditions of NCB may vary from insurer to insurer.

From an NCB for insurance, what are the most important takeaways?

In the insurance industry, there are several things to know about an NCB. To make things easier for you, we've compiled a list of the most important things to know about NCBs in insurance:

  • When a person does not file an insurance claim for a whole year, the insurance company awards the person with an NCB.
  • You can either get a discount on your insurance price or an increase in the quantity of coverage you have.
  • To put it another way, the NCB's cumulative gain cap indicates that you can only make a certain amount of cash.
  • There are no policy advantages or eligibility requirements associated with this coverage; it is purely an add-on benefit.
  • Young people may benefit from a smaller, slower-growing NCB in insurance rather than a larger, faster-growing one;
  • Financial protection or a super top-up should not include it.

What is NCB in car insurance?

Car insurance gives you a unique advantage by allowing you to lower your premiums even when the cost of everything else around you increases. You wonder how it works, don't you? It's a reward system. If you haven't filed a claim in the first year of your coverage, you get a 20% NCB discount. After two consecutive years of not filing a claim, you have gained an additional 5%. You should expect to see a 50% decrease in your monthly expenses in your sixth straight year. It all boils down to how well you drive and how well you take care of your vehicle when it comes to your car.

Benefits of NCBs in Car Insurance – NCBs

As a reward for your exemplary driving and car ownership, the NCB is nothing more than a token of appreciation.

In other words, NCB is linked to you as an individual, not your vehicle. No matter what kind of vehicle you own, as long as you've renewed your car insurance policies before their expiration dates, you can continue to reap the benefits of a No Claim Bonus.

Everyone appreciates saving money on their vehicle insurance premiums! Discounts! If you have a No Claim Bonus, at least 20% of your annual vehicle insurance premium will be held.

The process of transferring your NCB is quick and hassle-free in circumstances where you're either moving your insurance or car. Before your current insurance expires, you must ensure that you have a new policy in place.

What is NCB protection in car insurance?

An auto insurance policy's no-claims bonus is zeroed out if you ever file a claim. Suppose you have a 25% NCB in your auto insurance policy this year, and you have to file a claim due to an unexpected circumstance. Your NCB would be 0% at the time of renewal because you had a claim on your prior year's vehicle insurance policy.

This means that you can only claim NCB if you did not make a claim in the year prior. As a result, insurance companies in India have established the concept of No Claim Bonus Protection to keep clients' NCBs intact.

Protecting the customer's NCB in the event of up to two claims throughout the policy period is the No Claim Bonus protection goal. As an example, if you purchase the NCB protection add-on, you can make up to two claims in a policy period without losing your NCB. Even if you've had two claims in the preceding policy year, your NCB is protected by the NCB protector.


Your No Claim Bonus is protected for a maximum of two claims made in the prior policy period by the NCB protector. Damage to your windshield, total loss, and theft of your car or other car components are all included in the Own damage claims for Partial Loss made by you. If you have NCB protection in your auto insurance policy, you'll be able to keep your NCB for another year when you renew your insurance coverage.


If the car is moved from one client to another, this add-on will not be valid. After selling your automobile, you won't be able to get a new driver/owner the NCB protection cover because it's only offered to the original driver/owner and isn't transferable.

The NCB Protector is required

The no-claim incentive runs from 0% to 50% for each claim-free year and is categorized as 0%, 20%, 25%, 35%, 35%, 45%, and 50%. Customers can save up to 50% on their damage premium if they carry over their previous year's NCB from the previous policy year. Only if there was no claim in the prior policy year may the NCB be carried forward. In the event of a claim, the customer's NCB is forfeited, and they must begin from 0% NCB.

Because the NCB can rise by up to 50% for each year without a claim, this significantly impacts the customer's premium. Due to unavoidable circumstances, the customer may have had to file a claim even if he had 50% NCB on his policy copy. This means that he will lose his NCB and pay a much higher rate when he renews his vehicle insurance policy next year. Because of this, an NCB protector must be included in the car insurance policy consequently.

How to check NCB in car insurance

Car insurance clients who have not claimed during their previous policy period are eligible for an NCB at the time of renewal. Those customers who have not filed a claim in the last policy period are given a no-claim incentive. The no-claims motivation ranges from 0% to 50% for each year without a suit. The National Claims Bonus (NCB) in car insurance is only valid for 90 days following the policy expiration date, after which time the NCB will expire. The customer gets a better deal if the NCB is higher. If a claim is made, the NCB would be lowered to 0% and rise each year without a suit.

What you should know about NCB in the Insurance Industry

When does the NCB come to an end?

It has been demonstrated that NCB is useful. The benefit of NCB protection will continue to accrue as long as you do not file a claim. However, if you have to claim for any reason during a policy year, you will not be eligible to receive the benefit of NCB in the following policy year. It is critical to understand that if you do not renew your existing insurance policy within 90 days of its expiration date, your No Claims Bonus will be terminated, and you will no longer be eligible to receive the benefits of the No Claims Bonus. As a result, you should always renew your insurance coverage on time

How do I obtain an NCB Certificate?

The second question that comes up when it comes to NCB is how to obtain an NCB certificate. When a policyholder purchases an insurance policy, they are supplied with an NCB certificate. It is up to the policyholder to decide whether or not to file a claim within the policy year. Nevertheless, if the claimant claims, he will be ineligible for the NCB benefit for the following year; however, he will be eligible for the NCB benefit if the claimant does not claim for the entire year.

The term "Previous NCB" refers to the amount of money paid out in the past.

What happens if you don't file a claim and then decide to sell your automobile amid the year or buy another car in another situation?

If you purchase an old car from a dealer or any other third party and the vehicle is eligible for NCB, you can apply for a no-claim bonus transfer on the vehicle. Essentially, all you have to do in this situation is write to your insurance provider and advise them of the sale of your old automobile while also requesting that their NCB be transferred to your new car.

To get a new vehicle insurance policy with Digit, all you need to do is provide us with your current NCB, your prior insurer's name, and policy number (if you're purchasing a new car insurance policy with us for the first time). We'll take care of the rest.

How to transfer NCB to new Car Insurance?

This is dependent on whether you're purchasing your new car insurance online, through an agent, or in person at a dealership. You will need to transfer your No Claim Bonus if you buy your new vehicle insurance policy offline or through an agent. To do so, you will need to submit both your buyer-seller agreement (Forms 29 and 30) and a letter requesting the transfer of your NCB from your current insurance carrier.

After that, the respective insurer will issue you with an NCB certificate, which you will need to submit to your new vehicle insurance provider. In contrast, if you plan to purchase your new auto insurance online, you will not be required to do any of these steps. All you have to do is provide your new insurance provider with the correct NCB, old policy number, and name of the insurer, and they will handle the rest of the process on your behalf.

Documents required for the transfer of NCB funds

If you are applying for a job that requires documentation, you must submit each of the following documents together with your application:

  • A copy of the delivery notes that you obtained in connection with the sale of your old car.
  • A copy of the insurance policy for the previous vehicle.
  • A copy of the booking form that you received when you made the car purchase.

The no-claim incentive will be transferred to the new vehicle following the submission of the documentation mentioned above. The customer can take advantage of the discount on the insurance premium for the new car based on the NCB certificate that is currently in possession.


Premium payments, whether annual or monthly, represent an additional expense. Without a doubt, it is advantageous to pay a small premium to protect against emergencies and their expenditures. Accidents and crashes can be avoided, though, if one drives defensively. When there are no insurance claims, a No Claim Bonus can be earned, which can help to reduce the burden of premium payments. In addition, there is no harm to the vehicle at any time.