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This article explains No Claim Bonus (NCB) in motor insurance covering what it means, how IRDAI’s standardised discount slabs work from 20% to 50% and how to transfer, protect and maximise your NCB savings. Takes about 6 minutes to read.
Saved ₹11,500 on car insurance without doing anything special. That is what 5 claim-free years does for you, thanks to No Claim Bonus (NCB). It is a discount on the own-damage part of your motor insurance premium. Not a small one, either. NCB starts at 20% after your first clean year and climbs all the way to 50% at the 5-year mark. It works for cars and bikes alike, under comprehensive policies and IRDAI’s standardised slab structure means every insurer in India must honour it.
NCB can cut your own-damage (OD) premium by up to 50% after 5 consecutive claim-free years. The slab structure is standardised by IRDAI, all motor insurers in India must follow it.
NCB, or No Claim Bonus, is a discount on the own-damage (OD) premium portion of your motor insurance. Basically, don’t claim, pay less next year. Every full policy year you complete without raising an OD claim, your insurer knocks a bigger percentage off your renewal premium. Get to 5 years and you are paying half the OD premium you started with.
Here is the part that surprises most people: NCB belongs to you, not to the vehicle. Sell the car, buy a new one and your NCB comes with you. The buyer gets the keys, not your discount. Also worth knowing: NCB has 0 effect on your third-party (TP) premium. That is fixed by IRDAI. NCB only applies to the own-damage side.
NCB Slabs: The IRDAI-Standardised Discount Table
IRDAI mandates this exact structure across all motor insurers, no insurer can offer higher slabs and no insurer is allowed to skip them.
Consecutive Claim-Free Years
NCB Discount on OD Premium
1 year
20%
2 years
25%
3 years
35%
4 years
45%
5 years or more
50%
TIP: The ceiling is 50% – your NCB doesn’t keep rising after year 5, however long you go without a claim. If your OD premium is ₹12,000, a 50% NCB saves ₹6,000 on that line alone at every renewal. Across 5 years, cumulative savings on a mid-size car can easily top ₹15,000–20,000
NCB Applies to OD Premium Only: Here is Why That Matters
Your motor insurance bill has 2 distinct parts. The own-damage (OD) premium covers your car or bike against accidents, theft, fire, floods – damage to your actual vehicle. This is the only part NCB touches. The third-party (TP) premium is mandatory, fixed by IRDAI based on engine capacity and stays the same year after year regardless of how carefully you drive. So, when your insurer quotes ‘50% NCB’, they mean 50% off OD. Not off the total bill.
What Happens to NCB the Moment You Claim?
It goes to 0. One own-damage claim that is all it takes and your NCB resets to nil at the next renewal. Doesn’t matter if you were sitting on 5 years and a 50% discount. One claim wipes it off. This is the reason so many drivers quietly pay for small scratches and dents out of their own pocket instead of telling the insurer. A ₹3,000 repair versus losing a 50% discount? You can do the maths and see what benefits you.
WATCH OUT
One OD claim resets NCB to zero at the next renewal – even 50% built over 5 years is gone after a single claim. Before filing anything minor, compare the repair cost against what losing your NCB slab will cost you in extra premiums next year.
There is a fix for this: the NCB Protector add-on. It is optional, available on comprehensive policies and lets you make one claim (sometimes 2, depending on the insurer) during the policy year without your bonus resetting. Once your NCB crosses 35%, protecting it tends to be worth the small extra premium. Always check the terms – some insurers cap the protector at one claim event per policy year.
Transferring NCB: New Car, New Insurer, Same Discount
NCB follows you, not the vehicle. 2 moments where a transfer matters:
Switching insurers at renewal: Ask your existing insurer for an NCB Transfer Certificate before the policy expires. Hand that to the new insurer – they are required to honour the slab.
Selling your car and buying a new one: The NCB from your old policy can travel to the new vehicle’s policy. Get the certificate first and make sure the gap between policies does not exceed 90 days.
WATCH OUT
90-day rule: Any gap longer than 90 days between the old policy expiring and the new policy starting forfeits all accumulated NCB permanently. No insurer is permitted to offer a grace period for premium payment. Renew before the due date – every time.
NCB When You Sell Your Car
The buyer receives the vehicle and the insurance policy. What they do not receive is your NCB. IRDAI is clear on this – NCB is attached to the insured person, not the insured vehicle. The new owner starts building their own NCB from scratch. The one exception: if the policyholder passes away, the vehicle, the policy and the accumulated NCB all transfer together to the legal heir.
How to Check Your Current NCB Slab
Your policy document usually states the NCB percentage. If you need an official confirmation, call or write to your insurer and ask for an NCB Certificate – they pull your claim history and issue it. This certificate is what you present to a new insurer during a switch or when insuring a new vehicle.
NCB for Two-Wheeler Insurance
Bike owners earn NCB on exactly the same slab table as car owners. Same percentages, same rules, same 90-day lapse condition, same transfer mechanics. The rupee saving is smaller because two-wheeler OD premiums are lower – but the structure is identical. NCB Protector is available for bikes too.
NCB Protector: Worth the Add-On Premium?
At 35%, 45% or 50% NCB – almost always yes. Walk through the numbers. OD premium: ₹10,000. With 50% NCB, you pay ₹5,000. A minor accident, claim ₹6,000 for repairs. NCB resets to zero. Next year your OD premium is back to ₹10,000 – an extra ₹5,000 cost. The NCB Protector typically adds ₹300–700 to your premium. That is a clear trade-off in its favour. At 0–20% NCB, the maths is less compelling, but once you are in the upper slabs, the add-on earns its keep quickly.
Real-World Example: 5 Years of Savings
Priya bought a compact SUV. Comprehensive policy. Own-damage premium at inception: ₹10,000. She drove carefully, no claims.
Year 2 renewal: ₹7,500. Year 3: ₹6,500. Year 4: ₹5,500. Year 5 and beyond: ₹5,000. Across four renewal cycles, Priya paid ₹11,500 less on OD premium than she would have at the starting rate. Minor parking scuffs? Fixed privately. Bonus: intact. The compound effect of staying claim-free is real, and it shows up in your wallet every single renewal.
Fibe Drive lets you compare motor insurance policies for cars and bikes, so you start with the right comprehensive cover from day one – and start building NCB immediately.
FAQs On No Claim Bonus (NCB) in Motor Insurance
1. What is No Claim Bonus in motor insurance?
NCB is a discount on your own-damage (OD) premium, earned for each claim-free policy year. It starts at 20% after the first year and maxes out at 50% after five consecutive claim-free years, under IRDAI’s uniform slab structure.
2. Is NCB applicable on third-party car insurance?
No. NCB only applies to the own-damage component of a comprehensive motor policy. Third-party premiums are set by IRDAI and are unaffected by your claim record.
3. Can I carry NCB when I switch insurance companies?
Yes. Get an NCB Transfer Certificate from your current insurer before the policy lapses and submit it when buying the new policy. The new insurer must honour the same slab.
4. I haven’t renewed my policy in 4 months – have I lost my NCB?
Yes. Any gap beyond 90 days from the expiry date forfeits all accumulated NCB. You restart at 0% on the next policy.
5. Should I file a small claim if I have 50% NCB?
Generally, no. A single OD claim resets your 50% discount to zero, raising your OD premium at the next renewal by the full amount of the discount you were enjoying. For minor repairs you can cover privately, paying out of pocket and protecting the bonus is usually the better long-term call.
6. Are NCB slabs the same at every insurance company?
Yes. IRDAI mandates a uniform structure – 20%, 25%, 35%, 45%, 50% – across all motor insurers. No company can go higher, though NCB Protector pricing varies.
7. I bought a second-hand car – does the previous owner’s NCB transfer to me?
No. The seller retains their NCB. The new owner starts from zero. The seller can apply their accumulated NCB when insuring any new vehicle they purchase.
8. Can a claim be reversed to protect NCB?
Once settled and paid, reversing it for NCB purposes is usually not possible. If the claim is still pending, contact your insurer immediately – some allow withdrawal before final settlement.
