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What is No Claim Bonus (NCB)

Benefits

​​​​​No Claim Bonus or often just referred to as just the ‘NCB’ is one of the fundamental concepts of a motor insurance policy. It is a discount that can be availed in the two-wheeler insurance premium provided certain conditions are satisfied. Lets us understand NCB in detail.

How does NCB work


To begin with, NCB is something that has to be earned over the period of policy coverage.  It is not something that is available by default to the insured. In order to be eligible for the NCB, an insured has to refrain from registering any claims during the policy period. This means that you can only avail the NCB during the second policy year post renewal of the two wheeler insurance policy​. There is a certain pre-defined amount that you can avail during a particular year of the policy coverage. The following table gives you the percentage of NCB for a period beginning from the policy commencement to five years:

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From the above table, you can see that the maximum NCB one can avail is 50%.​
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No Claim Bonus & Claims​


Like mentioned earlier, the NCB is directly dependent on your claim history. So in simple terms, if you go claim-free for the duration of the policy period, you would be entitled to the NCB as per your eligible amount. As per the table, the NCB amount will go on increasing up to a period of five consecutive claim-free years. It is quite understandable that it tempting to file a claim for minor reasons. However, it is crucial that you calculate the long-term ramifications. For instance, if you are registering a claim for a meager amount and losing out on your NCB which is far greater, it does not make sense to do so. If you foresee yourself in such a dilemma, you can avail an add-cover called as ‘NCB retention’ cover. By availing it, you can insulate yourself from losing out on the NCB even after registering a claim. That said, there are certain limitations as well as conditions to the cover. It is advisable that you go through the policy wording carefully.
 

NCB Proof


If you are continuing with the same insurer, the NCB will be automatically reflected in your renewal letter. If you intend to switch to a different insurer you would need to submit the policy cover note of the previous insurer to the new insurer in addition to any other documents that may be requested. ​
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