No Claim Bonus (NCB): How to Transfer & Protect It
🔹 What Is No Claim Bonus (NCB)?
NCB is a discount you earn on your motor insurance premium for not raising any claims during a policy year. It can range from 20% to 50% and applies only to the Own Damage (OD) portion of your premium.
| Claim-Free Years | NCB Discount |
|---|---|
| 1 year | 20% |
| 2 consecutive years | 25% |
| 3 consecutive years | 35% |
| 4 consecutive years | 45% |
| 5 consecutive years | 50% |
✅ How to Transfer NCB When Buying a New Vehicle
Your NCB is linked to you (the policyholder) — not to the vehicle. Here’s how to transfer it:
🔁 From Old Car to New Car
- Request an NCB Certificate from your previous insurer.
- Share the certificate with the new insurer while purchasing insurance for the new car.
- The insurer will apply your NCB to the Own Damage portion of the new policy.
✅ Example:
If you had a 50% NCB and your OD premium on the new vehicle is ₹10,000, you’ll get a ₹5,000 discount.
🔁 When Switching Insurers
- At the time of policy expiry or renewal, your new insurer will ask for:
- NCB Certificate or
- Previous Policy + Renewal Notice
- The new insurer verifies the NCB and applies the discount.
🔒 Tip: Always declare the correct NCB. If a false claim is detected, the insurer may reject your claim or even cancel the policy.
🔒 How to Protect NCB (NCB Protection Add-On)
NCB protection is an optional add-on cover that helps you retain your NCB even if you make 1 or 2 minor claims during the policy year.
| Feature | NCB Protection Add-On |
|---|---|
| Claim Allowed | 1–2 claims per year |
| NCB Retention | Yes, NCB stays intact |
| Applicable On | Comprehensive policies only |
| Ideal For | Drivers with good track records who want peace of mind |
✅ Why It’s Useful:
One small accident shouldn’t cost you a 50% NCB loss. This add-on is especially useful if you’re nearing the maximum 50% discount.
📄 Documents Needed for NCB Transfer
- Copy of old insurance policy
- Renewal notice from previous insurer
- Sale deed / delivery note (if selling old car)
- RC of new vehicle (if applicable)
- Form 29/30 (vehicle ownership transfer, if buying used car)
🚫 When You Lose NCB
| Action | Impact on NCB |
|---|---|
| Raise a claim without NCB protection | NCB resets to 0% |
| Don’t renew policy within 90 days | NCB lapses entirely |
| Sell vehicle without transferring NCB | You lose the benefit |
🔁 Tip: Even if you sell your car, apply for an NCB retention letter within 90 days so you can use it on your next policy.
🧮 Example Calculation:
Scenario:
You have 50% NCB, and your OD premium is ₹12,000.
- Without NCB: ₹12,000
- With NCB: ₹12,000 – ₹6,000 = ₹6,000
If you make a claim and lose the NCB, your renewal premium could double next year.
🏁 Final Takeaways:
| Action | Why It Matters |
|---|---|
| Transfer NCB when switching or upgrading | Saves you money — up to 50% of OD premium |
| Protect NCB with an add-on | Avoids full loss of bonus over a minor claim |
| Act fast after policy lapse | NCB expires if you wait over 90 days |
| Keep it accurate | False NCB claims can void your policy |
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