A Guide to Calculate No Claim Bonus for Car Insurance Policy

Posted on March 28,2023


In car insurance policies, policy holders can enjoy a No Claim Bonus (NCB) starting from the second year. The NCB typically starts at 20% of the premium amount and increases up to 50%. A policy holder should essentially know that the NCB is provided on the Own Damage component of the premium. In this blog, we will look at how one can calculate the NCB on car insurance and the process to transfer it.

What is a No Claim Bonus?

A No Claim Bonus (NCB) is provided by a car insurance company to the insured if they have not filed any claims during the policy year. NCB of 20% to 50% is applied to Own Damage premiums when car insurance policies are renewed. The NCB is transferable even if the policy holder purchases a new vehicle.

Benefits of No Claim Bonus

These are the benefits of NCB in car insurance:
  • Policy holders can transfer the NCB from one car to another providing they are owned by the same person
  • They can also transfer the NCB from one insurer to another during policy renewal
  • NCB can be 20%-50% of the insurance premiums depending on the number of years for which the claims have not been raised by the policy holders.

Terms and Conditions of a No Claim Bonus

  • If an individual is selling a car and buying a new one, be sure to transfer the NCB to the new car. A certificate will be issued by the insurance company at the time of the transfer process. 
  • Third-Party car insurance coverage does not provide NCB; this benefit is only available if the owner opts for comprehensive or Own Damage cover insurance.

How to Calculate NCB?

Consider the case when a policy holder has not submitted any claim during the policy term. As a result, the next time whenever they renew their four-wheeler insurance policy, they will save on their insurance premium due to the non-filing of the claim during the prior insurance term.

After the first year without a claim, the NCB percentage rises progressively with each succeeding year until the policy holder reaches five years without filing a claim. This is a significant advantage in the long term because the Own Damage component makes up the majority of the insurance premium.

Claim Free Years

No Claim Bonus

After 1 year


After 2 years


After 3 years


After 4 years


After 5 years



How to Transfer the NCB to a New Car?

If policy holders switch insurance companies, the new insurance provider will allow them to retain the NCB. But they should make sure to not submit a claim request during a policy year if they want to take advantage of the retained NCB.

It is simple to transfer the NCB from the previous car insurance policy to the new policy of the vehicle. This can help to save on your new insurance policy’s premium. They will need to carry out the following steps to transfer their NCB to a new car:

  • Ask their current insurer for an NCB reserving/retention letter.
  • Fill in and submit Forms 29 and 30 to their current insurer. These forms are applications for transferring the NCB to the new car.
  • They must also send a notice stating the transfer of ownership of the old vehicle to the appropriate government agency.
  • A three-year NCB certificate will then be issued by their current insurer.
  • They can send this letter to the new insurer if they are switching car insurance companies.
  • They can also request a copy of the previous year's policy paperwork or renewal notice from their current insurer. Their qualified NCB will be mentioned in these documents.

If the policy holders are willing to change the insurance company, they can still retain the NCB. The following are the steps they should take while changing the insurance company:

  • Ask the original insurer for an acknowledgement letter indicating the NCB accumulation (Optional).
  • Select the new insurer they want to go ahead with.
  • Fill in their requisite form.
  • Provide proof of NCB along with the original policy papers.

When Does the No Claim Bonus Feature Expire?

The NCB will expire in the following situations-

In a Nutshell

No Claim Bonus will be beneficial for drivers and car owners who drive carefully. In Shriram General Insurance, for each claim-free year, the policy holder can get NCB up to 50%.

Shriram General Insurance helps you to drive your dream car with confidence. With a 24/7 claim notification service, our representatives will give assistance in real-time. Any queries raised by the policyholder will be answered in a timely manner. Hence, buy or renew a Shriram Car Insurance policy online immediately.


Key Highlights

  • No Claim Bonus, often known as NCB, is provided by an insurance company to an insured if they do not file any claims during the course of the policy year.
  • NCB can be 20%-50% of the insurance premiums depending on the number of years for which the claims have not been raised by the policy holders.
  • NCB can be continued even if a policy holder purchases a new vehicle.
  • One can use the NCB car insurance calculator for calculating NCB on their car insurance.

Frequently Asked Questions

  1. What is the maximum NCB on car insurance?

When a policy holder doesn't file a claim for their car insurance during the policy period, they will gain NCB. Accordingly, the No Claim Bonus will increase up to a maximum of 50% over five claim-free years. One can use the NCB car insurance calculator for calculating NCB on their car insurance.

  1. How much is the No Claim Bonus and how to calculate NCB insurance?

The NCB ranges from 20% to 50%. During renewal, the NCB is provided on the Own Damage premium.

  1. What are the benefits of Shriram Car Insurance?

Shriram Car Insurance comes with multiple benefits for the policy holders including the following:

  • Affordable premiums
  • Comprehensive coverage
  • Multiple add-on options
  • Quick settlement of claims
  • Roadside assistance and on-time customer service




Make your ride reliable, Insure it now! with Shriram General Insurance

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