What Is No-Claim Bonus (NCB)?
No-Claim Bonus is a discount on your Own Damage (OD) premium rewarded each year you do not file a claim. It starts at 20% after the first claim-free year and rises to 50% after five consecutive claim-free years — effectively halving your motor insurance premium.
NCB Slabs at a Glance
| Claim-Free Years | NCB Discount |
|---|---|
| 1 year | 20% |
| 2 years | 25% |
| 3 years | 35% |
| 4 years | 45% |
| 5+ years | 50% |
How NCB Transfers Work
NCB belongs to the owner, not the vehicle. When you switch insurers or buy a new car, your NCB follows you — provided you transfer it within 90 days using an NCB Retention Letter from your previous insurer.
When Does NCB Reset to Zero?
Your NCB resets to 0% the moment you file any claim — even a minor one. This is why it often makes financial sense to pay small repairs out of pocket rather than filing a claim and losing your NCB.
Should You Claim or Pay Out of Pocket?
Quick rule of thumb: if the repair cost is less than your premium × 2, pay out of pocket. Example:
- Current OD premium: ₹10,000/year with 35% NCB (saving ₹3,500)
- Repair estimate: ₹4,000
- If you claim: you lose ₹3,500 NCB next year, pay ₹4,000 deductible risk — total impact ~₹7,500+
- Decision: Pay ₹4,000 out of pocket and protect the NCB
Protect Your NCB with NCB Protect Add-On
Most insurers offer an NCB Protect add-on (typically ₹500–₹800/year) that lets you make 1–2 claims in a policy year without losing your NCB. It's worth it at NCB levels of 35% and above.
Key Takeaways
- NCB is yours to keep — even when you change insurer or vehicle.
- One claim resets it to zero (unless you have NCB Protect).
- At 50% NCB, you're paying half the OD premium — significant savings on expensive vehicles.
- Get an NCB Retention Letter when switching insurers; it's valid for 3 years.