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How does NCB Help in Reducing Premium?
Aug 3, 2010

All you need to know about No Claim Bonus (NCB)

The No Claim Bonus is a great way to progressively reduce your vehicle insurance premium. For example, the table below shows the premium payable towards a Maruti Wagon R costing INR 3.6 lakhs, over six years in following scenarios:
  • Scenario 1: When no claim is made and the No Claim Bonus is earned, as applicable
  • Scenario 2: When a claim is made every year
IDV Scenario 1 (With NCB) Scenario 2 (Without NCB)
Year Value in INR NCB % Premium NCB % Premium
Year 1 360000 0 11,257 0 11,257
Year 2 300000 20 9,006 0 11,257
Year 3 250000 25 7,036 0 9,771
Year 4 220000 35 5,081 0 9,287
Year 5 200000 45 3,784 0 9,068
Year 6 180000 50 2,814 0 8,443
  If you are carrying forward a NCB in bike insurance / car insurance on your vehicle, you can get it transferred to a new vehicle of the same type (four-wheeler to four-wheeler, two-wheeler to two-wheeler). This way, you can slash between 20% and 50% on the first premium payable (when it is the highest) on your new vehicle. Example: You buy a new Honda City, costing INR 7.7 lakhs. In normal circumstances, the Own Damage Premium payable towards its insurance for the first year would be INR 25,279. However, if you were to transfer the 50% No Claim Bonus (the best case scenario) on your old vehicle to the Honda City, you would pay INR 12,639 as Own Damage Premium in the first year a 50% saving.

Can my No Claim Bonus be forfeited? If yes, then why?

Your NCB will be forfeited in the following cases only:
  • If the claim is made during a policy period, you will not be eligible for any NCB in the corresponding year
  • If there is a break in the insurance period for more than 90 days, i.e. if you do not insure within 90 days of the date of expiry on your existing policy
  • If you are the second owner of the vehicle, then you will not be able to use the first owner’s NCB i.e. you will be eligible for 0% NCB for the policy year

Can I transfer the NCB from an old vehicle to a new vehicle?

You can transfer the NCB from your old vehicle to a new one for the same class and type of vehicle. To transfer, keep the following in mind:
  • When you sell your old vehicle, ensure that ownership is transferred and make a photocopy of the new entry in the RC book for insurance purpose
  • Obtain the NCB certificate. Forward a copy of the delivery note to your insurance company and ask for the NCB certificate or holding letter. This letter is valid for three years
  • When you buy a new vehicle, get the NCB transferred to your new motor vehicle insurance policy
Learn more about motor insurance policy and insure your vehicle with the best motor insurance plan

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