No Claim Bonus (NCB) in a Car Insurance Policy

A No Claim Bonus or NCB in insurance encourages car owners to drive more responsibly by rewarding them with discounts. Therefore, having a better understanding of NCB in a car insurance policy can help you with significant savings. Find out more about No Claim Bonus meaning and how you can use it to lower your policy premium rates in this post.

What is NCB in Car Insurance?

A No Claim Bonus (NCB) is a discount that policyholders get from us for not making any claims during a policy year. It is simply our way to reward a customer's good driving behaviour.

In simple terms, NCB in insurance generally works to make premiums during policy renewals more affordable through the application of a discount.

What Should You Know About NCB in Car Insurance?

Maximum NCB Discount is 50%

With Reliance General Insurance, the NCB discount can be accumulated over the years and ranges from 20% to 50%.

Applicable Only to Own Damage Premium

It applies specifically to the own damage premium. Therefore, it is available for own damage and comprehensive car insurance policies and is not applicable to third-party car insurance plans.

How Does No Claim Bonus in Car Insurance Work?

The basic thing to know about NCB for car insurance is that it is not handed over to the policyholder by default. The only way to earn NCB is by refraining from raising any claim during your policy period.

It has to be earned by driving carefully and responsibly all through the policy period so that you can avoid accidents and, consequently, make claims for the same.

For every claim-free year, we apply a predefined percentage of discount to the premium. Say at the end of 12 months the insured did not claim any own damage. In this case we provide them a discount by giving NCB based discounts on their premium.

With every claim-free year, the NCB typically increases from 20% to 50% over five consecutive claim-free years.

How is No Claim Bonus in Car Insurance Calculated?

NCB can only be used when you renew your car policy and not before that. The NCB percentages are also predefined for up to 5 years.

Benefits of No Claim Bonus in Car Insurance

Reward for Responsible Driving

No Claim Bonus is our way of rewarding your responsible driving. As it increases over the subsequent claim-free years, it encourages you to be a more disciplined driver.

Reduction in Premium Amount

NCB plays a significant role in lowering the premium. It allows you to save between 20% and 50% on your car insurance premium.

NCB Can Be Transferred Between Insurers

NCB can be transferred from one insurer to another. This is because NCB is awarded to the policyholder and not the policy or the vehicle.

So, when you choose to buy a new policy, you can transfer your accumulated NCB discount from your old policy, which will give you a considerable discount on your new policy premium quote.

NCB Can Be Transferred Between Vehicles

As the No Claim Bonus is provided for your responsible driving skills, it can be transferred to a new vehicle.

So, if you sell your old vehicle and purchase a new one, it can be transferred to your new car insurance policy.

Also, if the vehicle is sold during the policy period, the insurer issues an NCB reserving certificate, which is valid for three years from the date of sale.

How to Apply NCB for Reduced Premium?

For car insurance with no claim bonus, the NCB is automatically applied by us upon renewal. If not, you can mention that you have an accumulated bonus at the time of renewal on the renewal form.

Provide accurate details or verify the number of claim-free years as applicable to ensure you receive the correct discount.

How Can I Check NCB in Car Insurance?

The details of your No Claim Bonus will be mentioned on the webpage at the time of car insurance renewal. If you have transferred it to your new car or insurance provider, it can also be checked at the time of the new policy purchase.

What Leads to No Claim Bonus Termination?

• If you file a claim during the policy year.
• If you have not renewed your car insurance policy within 90 days of its expiry.

Can I Protect My No Claim Bonus?

Opt for the NCB Retention Cover Add-On

In case of an Own Damage claim filed in the next policy year, No Claim Bonus gets back to 0%. This means you have to start all over again to try and get an NCB discount during the next policy period.

If you want to avoid this, you can opt for our NCB Retention Cover add-on.

The NCB Retention Cover Add-on in our Reliance General car insurance allows you to retain the No Claim Bonus even after making a claim.

Under our NCB-protected cover, you can file up to two claims each policy year while retaining your NCB discount.

If you file over 2 claims within the policy year, your NCB discount will reset to 0%.

Also Read: ​Car Insurance Terms

Make Informed Claim Decisions

As the No Claim Bonus in car insurance re​wards you for not filing a claim, it is important and wise to make claims only when absolutely necessary.

However, that does not mean you should avoid claiming if your car is heavily damaged due to an accident. Take professional help from a mechanic to find out what the estimated cost of the repair work could be.

If the cost is nominal, you can pay out of your pocket, but if there are damages that require major repair, you should raise a claim and think about NCB later.

Make Timely Car Insurance Policy Renewals

Renewing your car insurance policy at the right time is crucial to securing the No Claim Bonus. It should be renewed within 90 days of the previous policy’s expiry date.

Steps to Renew Reliance General Insurance Car Insurance Policy

• Step 1: Visit our official car insurance policy website.
• Step 2: Under the Renewals tab, choose Renew Car Insurance.
• Step 3: Provide your mobile number or existing policy number.
• Step 4: Verify your car details and make changes if necessary.
• Step 5: The screen will also display the NCB. Verify the NCB details.
• Step 6: Personalise your car insurance plan by including add-on covers such as the NCB Retention Cover if you feel it is necessary.
• Step 7: Pay the applicable renewal premium.

Once the payment is successfully made, your car insurance renewal with us will be confirmed and you will receive a digital copy of your renewed car insurance policy on your registered email ID.

Who Should Opt for an NCB Retention Cover Add-On?

The NCB Retention Cover is beneficial for all categories of car owners. However, it is especially important if any of the following apply to you:

Owners of Expensive Vehicles

Replacing or repairing a high-value car can be costly, especially in the case of theft. The NCB retention cover helps you keep your accumulated bonus even if you make a claim.

Residents in High-Risk areas

If you live or drive in areas prone to natural calamities, theft or accidents, the likelihood of filing a claim increases. The NCB retention cover helps you retain your bonus despite these high risks.

Long-Term Vehicle Owners

If you have owned your car for more than two years and have accumulated a significant No Claim Bonus, the NCB retention cover ensures you don’t lose this discount benefit after making a claim.

How to Transfer No Claim Bonus to a New Car Insurance Provider?

If you choose to change your car insurance provider, you can transfer the NCB to the new insurer online or offline.

Steps for Online Transfer

• Step 1: Mention the No Claim Bonus earned at the time of buying car insurance online.
• Step 2: Provide the previous insurer details and the policy number.
• Step 3: The new insurer will be able to get the NCB transferred from the previous insurer.

Steps for Offline Transfer

• Step 1: Contact the previous car insurer and request for the NCB Certificate.
• Step 2: Provide all the necessary supporting documents.
• Step 3: Upon verification of your request and the documents, you will receive the NCB Certificate.
• Step 4: Submit this NCB Certificate to the new insurance provider to complete the transfer process.

Documents Required for Transferring No Claim Bonus in Car Insurance

• Application form for No Claim Bonus
• Copy of the previous car insurance policy
• Form 29 and Form 30 - Sales Agreement
• If it is a new vehicle, a copy of the booking receipt
• If it is the sale of an old vehicle, delivery note and copy of ownership transfer certificate

NCB Transfer - Terms and Conditions

• The NCB can be transferred from one vehicle to another as long as the policyholder remains unchanged.
• The NCB can only be transferred from one insurer to another during policy renewal.

Conclusion

A No Claim Bonus (NCB) is a discount on policy premiums that the insurer offers to a policyholder for making no claims during a policy year. It’s a great addition to any comprehensive car insurance policy, especially Long Term Car Insurance.

Moreover, you can also transfer your accumulated NCB within 90 days of your renewal date from one insurer to another. So if you’re currently on the lookout for a new car insurance plan, you’ll be happy to know that Reliance General Insurance allows NCB transfers.

However, remember to present your No-Claim Bonus certificate from your previous insurers to ensure the transfer.

Frequently Asked Questions

1. Is NCB affected while transferring car insurance policies?

   No, when you transfer from one car policy to another, your accumulated NCB percentage will remain the same. You will receive the same discount under your new insurer after transference.

2. Is it possible to avail NCB under my name for multiple cars?

   Yes, you can avail NCB under your name for multiple cars as long as you do not make any claims during your policy term for those cars.

3. How do you calculate NCB for car policies?

   The calculation of NCB is based on the number of years that are claim-free. The percentage keeps increasing every consecutive year without a claim from your end.

Disclaimer:*T&C apply. For more details on risk factors, terms conditions, brochure, and exclusions, please read the policy wording and CIS carefully before concluding a sale. Details mentioned here are for the product- Reliance Private Car Package Policy. UIN: IRDAN103RP0010V02100001; Reliance Private Car Policy – Bundled, UIN: IRDAN103RP0007V02201819; Reliance Private Car Policy- Standalone Own Damage UIN- IRDAN103RP0001V01201920; "A" Policy for Act Liability Insurance ( Pc /Tw/Commercial ), UIN: IRDAN103RP0003V01200102; A" Policy for Act Liability Insurance (Private Car) – 3 years, UIN: IRDAN103RP0003V01201819;

Premium: The premium mentioned for car Insurance is excluding taxes for the private car model Maruti Suzuki Alto 800 with cubic capacity of less than 1000 cc for a 1 year Own Damage Insurance policy for an IDV of ₹2,34,728. Premium used is 2,853/year as on 1 March 2023 and then converted into a per month basis, which gives us ₹238/month (2,853/12).

Discount: The discount varies basis vehicle specifications, No Claim Bonus discount and Geographical location of the vehicle to be insured. Discounts have been calculated on the basis of the rates prescribed under erstwhile Indian Motor Tariff. Discounts are applicable only to the Own Damage section and discounts may vary as per the vehicle make, model, RTO, age of the vehicle and addition of add-ons like Reliance Limit Sure-Pay As You Drive.

Network Garages: The number of garages mentioned is the total of all the garages empanelled across the country for different vehicle categories.

Claim Settlement Ratio: This is the overall claim settlement ratio for FY 2023-24 without claim outstanding at the start of the financial year as per public disclosure of Reliance General Insurance Co. Ltd.​