Understanding No Claim Bonus (NCB) in Car Insurance: A comprehensive guide


23 March,2023


30 May,2024

no claim bonus in car insurance

Car Insurance is a critical aspect of responsible vehicle ownership, and understanding the intricacies of insurance components like No Claim Bonus (NCB) is essential. In this comprehensive guide, we will delve into the various facets of NCB, shedding light on its significance and the benefits it offers to policyholders.


What is NCB in insurance?

No Claim Bonus, commonly referred to as NCB, is a reward given to policyholders who do not file any claims during the policy period. Essentially, it serves as a discount on the insurance premium, encouraging safe driving practices.


NCB is calculated as a percentage of the own damage premium and accumulates over consecutive claim-free years. The longer you refrain from making claims, the higher your NCB percentage becomes.


What is the Maximum No Claims Discount in Car Insurance?

The No Claims Bonus (NCB) discount in Car Insurance typically begins at 20% for one claim-free year. This percentage grows with each claim-free term, reaching a peak of 50% after five consecutive claim-free policy periods. Therefore, maximising the NCB benefit is achievable by refraining from making claims, thereby reducing the payable premium.


What is the validity of No Claims Bonus?

The validity of a No Claims Bonus (NCB) typically lasts for up to 90 days after the policy lapses. This means that if a policyholder does not renew their Car Insurance Policy and the policy lapses, they have up to 90 days to reinitiate their Car Insurance Policy and still be able to avail of the NCB benefits. These regulations are enforced uniformly across insurance companies.


NCB increment slab

Generally speaking, insurance companies offer the following discounts based on the number of claim-free years.


Claim-free renewals (years)

Discount on Own Damage Premium

First-year claim-free renewal


Second consecutive claim-free renewal


Third consecutive claim-free renewal


Fourth consecutive claim-free renewal


Fifth consecutive claim-free renewal



What is a No Claim Bonus Certificate?

No Claim Bonus Certificate is a document provided by the insurance company to the policyholder as proof of their accumulated NCB. This certificate serves as evidence of the policyholder's claim-free record and the corresponding discount they are eligible for when renewing their Car Insurance Policy with a new insurer.


When policyholders switch to a different insurance provider, they can present the NCB Certificate to avail of the NCB benefits, which leads to a premium discount on the new policy. The certificate typically includes details such as the policyholder's name, policy number, the percentage of NCB earned, and the expiry date of the NCB. It's essential to keep this certificate safe and readily accessible during the process of switching or renewing Car Insurance Policies.


Things to know about incorrect NCB

Making false claims about your NCB or past claim history to an insurer is a violation of the principle of good faith. This breach can lead to severe consequences, including potential nullification of the insurance policy, claim denials, or legal repercussions. Good faith is a fundamental principle in insurance contracts, mandating all parties to act with honesty and transparency, refraining from misleading or withholding essential information.


When transitioning between insurance policies, it's vital to truthfully disclose any information regarding claims made with the previous insurer within the same year. Insurance companies have easy access to this data, and concealing it can significantly impact future claims, possibly resulting in unfavorable outcomes.


Does Shriram Car Insurance offer NCB?

Yes, Shriram Car Insurance indeed provides the No Claims Bonus (NCB) benefit for eligible policyholders. As mentioned earlier, eligibility for NCB is determined by the number of claim-free years. The NCB percentage begins with a 20% reduction in premium for the first claim-free year and progressively increases to a 50% discount after five consecutive claim-free years.


Summing up

In summary, No Claims Bonus (NCB) in Car Insurance serves as a reward for policyholders who demonstrate safe driving habits by refraining from making claims during the policy term. This accumulated NCB translates into a tangible benefit in the form of a reduced premium in the subsequent policy term. Understanding how NCB works and the factors that can impact it is crucial for maximising its benefits.



This section goes over commonly asked questions about No Claim Bonus in Car Insurance.


1. What is No Claim Bonus in Car Insurance?

In the realm of Car Insurance, No Claim Bonus holds particular importance. It serves as a tangible acknowledgment of the policyholder's safe driving record and acts as a powerful incentive for maintaining a claim-free history. One of the key benefits is the reduction in premium costs, making it a win-win situation for responsible drivers and their insurers.


2. How to get a NCB Certificate?

Obtaining an NCB certificate is a straightforward process. It involves contacting your insurance provider and requesting the certificate. Many providers also offer the option to obtain the certificate online, simplifying the documentation process for policyholders.


3. What happens to the accumulated NCB when switching insurance providers?

When switching insurance providers, the policyholder can transfer their accumulated NCB to the new insurer by providing the NCB Certificate as proof of their claim-free record. The new insurer will then apply the relevant NCB discount to the premium for the new policy.


4. Is it possible to lose NCB?

Yes, it is possible to lose NCB if you make a claim during the policy term or if you fail to renew your policy after 90 days from its expiry.


5. How is NCB calculated?

The NCB percentage increases with each claim-free year, up to a maximum of 50% after five consecutive claim-free years.


6. Can NCB be transferred to a new car?

Yes, NCB can usually be transferred from an old car to a new car, provided the policyholder purchases a new car and insurance policy.


7. What happens to NCB if I sell my car?

If you sell your car, you can retain the NCB for up to 90 days and use it when you purchase a new car and insurance policy.


8. Can I use NCB for multiple cars?

Usually, the No Claims Bonus (NCB) is associated with the vehicle owner rather than the vehicle itself, allowing it to be utilised for only one vehicle at a time.


9. What is an NCB Certificate?

An NCB Certificate is a document provided by the insurance company as proof of the policyholder's accumulated NCB, which can be used when switching to a new insurance provider.


10. Is NCB available for Third-Party Insurance?

No, NCB is not applicable to Third-Party Car Insurance Policies.


11. Can I avail of NCB if I renew my policy after it has expired?

Usually, NCB can be retained for up to 90 days after the policy lapses, allowing for its use when renewing the policy with the same or a different insurer within this period.

Save up-to the 85% off on your car Insurance

Save up-to 85% off on your Car Insurance

Save up-to the 85% off on your car Insurance

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