No Claim Bonus (NCB): How to Transfer & Protect It (2025 Guide)

For vehicle owners in India, the No Claim Bonus (NCB) is one of the most valuable benefits of an insurance policy. Simply put, it rewards you for being a careful driver by offering a discount on your premium if you don’t make any claims during the policy period. In 2025, understanding how to transfer and protect your NCB is crucial for maximizing your insurance savings.

This guide explains everything you need to know about NCB, from transferring it between policies to safeguarding it during accidents, renewals, and policy changes.

What is No Claim Bonus (NCB)?

A No Claim Bonus (NCB) is a discount offered by insurers on your premium for not making any claims in the previous policy year. The percentage of discount typically increases with consecutive claim-free years, often up to 50% for five claim-free years.

Key points about NCB:

• Applies only to own damage premium in motor insurance.
• Does not transfer automatically if a policy lapses.
• Available for private cars, two-wheelers, and commercial vehicles.

How NCB is Calculated

Most insurers follow a standard NCB structure:

It’s important to note that making a claim reduces or resets your NCB, depending on the insurer and the type of claim.

How to Transfer NCB

NCB can be transferred in various situations:

1. Policy Renewal with the Same Insurer

Most insurers automatically apply your NCB during renewal if the previous policy was active and claim-free. You only need to ensure:

• The renewal happens before the policy expiry date.
• You provide previous policy documents if requested.

2. Switching Insurers

If you choose a new insurer, NCB is still transferable. Steps include:

• Submit your previous policy certificate to the new insurer.
• Ensure there’s no gap in insurance coverage.
• Verify that the new insurer recognizes your NCB percentage.

3. Transferring NCB to a New Vehicle

NCB can also be transferred if you buy a new car or bike:

• Provide the old vehicle’s policy certificate.
• Some insurers may require proof of claim-free driving history.
• NCB can only be applied once per vehicle.

Protecting Your NCB

Maintaining NCB requires caution, as any claims may reduce your discount. Here’s how to protect it:

• Opt for zero-depreciation add-ons: This allows small claims without impacting NCB.
• Handle minor damages personally: Avoid filing claims for minor scratches or dents.
• Report claims carefully: If you must claim, consult your insurer about the impact on NCB.
• Avoid lapses: Renew your policy on time; a break in coverage can invalidate your NCB.

Common Questions About NCB

Q1. Can NCB be applied to third-party insurance?

No. NCB applies only to the own damage component of motor insurance. Third-party premiums do not carry any discount.

Q2. Does NCB apply to multiple vehicles?

Each vehicle earns its own NCB. However, transferring NCB from one vehicle to another is possible if you sell the old vehicle and buy a new one.

Q3. What happens if I make a partial claim?

Many insurers reduce the NCB percentage instead of resetting it entirely. For example, a 3-year NCB of 35% may reduce to 20% after a minor claim.

Q4. Can NCB be combined with other discounts?

Yes. NCB can be combined with long-term renewal discounts, anti-theft device discounts, or loyalty bonuses offered by insurers.

NCB in 2025: Trends and Changes

In 2025, insurers are making NCB management more customer-friendly:

• Digital verification: NCB can now be verified online during policy switching.
• Faster transfer: Switching insurers or vehicles now takes less time.
• Partial claim options: Some insurers allow retaining NCB even after small claims with specific add-ons.
• Flexible policies: Renewal reminders and auto-application of NCB ensure no loss due to human error.

These improvements make it easier than ever to transfer and protect your NCB.

Final Thoughts

The No Claim Bonus (NCB) is more than just a discount—it’s a reward for safe driving and careful handling of your vehicle. By understanding how to transfer, protect, and maximize it, you can save thousands on your insurance premiums.

Whether renewing with the same insurer, switching companies, or buying a new vehicle, taking the right steps ensures your NCB remains intact. In 2025, digital tools and improved policy options make managing your NCB simpler than ever.

Plan ahead, drive safely, and make the most of your No Claim Bonus (NCB) to reduce insurance costs while staying protected on the road.

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