NCB in Car Insurance

NCB full-form in car insurance in No Claim Bonus. It is a reward provided by insurance companies to policyholders who have maintained a claim-free record during the policy term. It acts as an incentive for responsible driving and careful vehicle maintenance.

The NCB offers a discount on the premium amount at the time of policy renewal, ranging from 20% to 50%, depending on the number of consecutive claim-free years. This bonus not only helps reduce the cost of insurance but also promotes safe driving practices.

For example, imagine Priya owns a car and has a comprehensive car insurance policy. She drives responsibly and has not filed any claims for minor scratches or repairs for five consecutive years. When it is time to renew her policy, she qualifies for a 50% discount on her premium due to her NCB. Furthermore, if Priya decides to buy a new car, her accumulated NCB can be transferred to the new policy, helping her save on premiums for her new vehicle as well.

NCB is a transferable and valuable feature, offering significant savings and rewarding policyholders for their cautious driving habits, making it an essential consideration in car insurance planning.

Also Read:

What is IDV in Car Insurance

5 Things You Should Know About No Claim Bonus

The No Claim Bonus (NCB) becomes applicable from the second year of your car insurance policy. If you complete the first year without filing any claims, your insurer rewards you with a 20% discount on the premium at renewal. This discount increases progressively with each claim-free year, reaching a maximum of 50% after five consecutive years.

The NCB discount applies only to the Own Damage (OD) premium in your TATA AIG Car Insurance policy. To better understand how NCB accumulates, here is a breakdown:

For example, if your annual premium is ₹10,000 and the Own Damage (OD) component is ₹6,000 and the remaining ₹4,000 is for third-party coverage, and you have not made a claim for three years, you will enjoy a 35% discount.

So, the discount will be ₹2,100, which is 35% of ₹6,000. Your renewal premium will now be ₹7,900 (₹10,000 - ₹2,100).

The No Claim Bonus calculator can help you calculate this easily. NCB encourages responsible driving and vehicle care while significantly reducing your insurance costs over time.

TATA AIG’s No Claim Bonus (NCB) is a valuable feature in car insurance that rewards policyholders for safe driving and maintaining a claim-free record. It offers several benefits that can enhance your insurance experience while encouraging responsible driving habits. Here are the key advantages of NCB in car insurance:

Significant Savings on Premiums: One of NBC's most notable benefits is the discount it offers on car insurance premiums during renewal. This discount starts at 20% after the first claim-free year and can increase to 50% after five consecutive claim-free years. Over time, this can result in substantial savings, making car insurance more affordable for responsible drivers.

Encourages Safe Driving: TATA AIG’s NCB acts as an incentive for maintaining good driving habits. By driving carefully and avoiding accidents, you can ensure a claim-free record, which directly translates to a higher NCB and lower premiums. This motivates policyholders to prioritise road safety.

Transferable Benefit: The NCB is tied to the policyholder and not the vehicle. This means you can transfer your accumulated NCB when switching to a new car or a new insurance provider. This flexibility ensures that your efforts to maintain a claim-free record are not wasted.

Long-Term Financial Benefits: While the immediate benefit of our NCB is a lower premium, its impact is more significant in the long term. Over multiple years, the cumulative savings from NCB can be substantial, allowing you to allocate those funds to other financial priorities.

Reward for Responsible Vehicle Ownership: TATA AIG’s NCB cover is a reflection of your responsible behaviour as a car owner. It acknowledges your efforts in maintaining your vehicle, avoiding unnecessary claims and driving safely. This recognition adds value to your overall insurance experience.

Customisable Coverage: The savings from NCB can be used to enhance your car insurance policy by opting for add-on covers such as zero depreciation, roadside assistance or engine protection. This allows you to maximise your policy’s benefits without significantly increasing your premium.

No Impact on Third-Party Claims: If you make a claim with us against third-party liability, it does not affect your NCB. This ensures that your bonus remains intact even if you need to fulfil your legal obligations under third-party insurance.

While the No Claim Bonus (NCB) is a valuable reward for maintaining a claim-free record, certain rules govern its application. Being aware of these rules ensures you can fully enjoy its benefits without any misunderstandings.

Benefits Cap: The NCB percentage increases with each consecutive claim-free year, starting at 20% after the first year and reaching a maximum No Claim Bonus in car insurance of 50% after five years. However, this is the highest discount you can earn. Even if you continue to avoid claims beyond five years, the NCB will not exceed the 50% cap.

Applicable Only on Own Damage Premium: The NCB is calculated only on the own damage component of your car insurance premium, not the entire policy premium. The own damage premium covers damages to your vehicle, while the third-party liability premium is fixed and mandated by law.

For instance, if your total premium is ₹10,000, and the own damage component is ₹6,000, the NCB discount will apply only to ₹6,000, not the full amount. Miscalculating the NCB by including the third-party premium can lead to incorrect expectations.

Correct Declaration is Crucial: Providing accurate information about your NCB is essential during policy renewal or claim filing. If you overstate your NCB percentage or provide incorrect details, the insurer may reject your claim or deny the NCB benefit. Always verify your NCB details with your insurer to avoid complications.

NCB is Non-Transferable to a New Owner: The NCB is tied to the policyholder, not the vehicle. If you sell your car, the accumulated NCB cannot be transferred to the new owner. However, you can transfer it to a new vehicle purchased in your name or retain it for future use, provided the transfer is completed within a stipulated time.

Lapses Due to Policy Expiry: If your car insurance policy is not renewed within the grace period (typically 90 days), you lose your accumulated NCB. Timely renewal is crucial to preserve your claim-free record and continue enjoying the benefits.

Also Read: How Can You Claim NCB for Your Car Insurance

The No Claim Bonus (NCB) is a valuable incentive offered to policyholders for maintaining a claim-free record. However, there are specific circumstances where the NCB benefit can be terminated. Understanding these scenarios can help you avoid losing this reward and its associated financial advantages.

Filing a Claim During the Policy Year: The primary condition for earning an NCB is to maintain a claim-free record. If you file a claim during the policy year, your eligibility for the NCB in the following renewal cycle is forfeited.

For instance, if you file a claim for damages to your car within the first year of your policy, you will not receive the 20% NCB discount during the next renewal. This rule encourages policyholders to avoid minor or unnecessary claims and save their NCB for larger savings in the long term.

Failure to Renew the Policy Within the Grace Period: Timely renewal of your car insurance policy is crucial to retaining your accumulated NCB. TATA AIG provides a grace period of 90 days after the policy expiration date to renew without losing benefits.

If you fail to renew your policy within this window, your NCB is reset to zero, regardless of how many claim-free years you had previously accumulated. For example, if you had a 50% NCB after five claim-free years but did not renew your policy within the stipulated 90 days, your hard-earned bonus will be lost.

Transfer of Ownership Without Retaining NCB: The NCB is associated with the policyholder and not the vehicle. If you sell your car without transferring or retaining your NCB, the accumulated bonus is terminated. To retain the NCB, you must inform your insurer and request a certificate of NCB transfer, which can then be applied to a new policy for another vehicle purchased in your name.

Switching Insurers Without Declaring NCB: When changing insurance providers, it is essential to declare your existing NCB and provide proof of your claim-free record. Failure to do so may result in the termination of your NCB, as the new insurer may not recognise your previous bonus. Always request an NCB certificate from your current insurer when switching providers.

Also Read: How to Get NCB Certificate

It is possible to protect your No Claim Bonus in car insurance even after filing a claim, thanks to the NCB Protector add-on. By opting for this rider at an additional premium, policyholders can preserve their accumulated NCB benefits and continue to enjoy discounted premiums during policy renewal, despite making a claim.

The NCB Protector cover from TATA AIG is one of the most sought-after add-ons because it ensures that policyholders do not lose the significant savings accrued through their claim-free years. Since the NCB discount increases progressively with each consecutive claim-free year—reaching up to 50% after five years—this add-on helps retain those savings, making it a cost-effective choice for the long term.

For instance, starting from the second year, policyholders with an NCB Protector can benefit from reduced premiums, ensuring affordable coverage without compromising on claims when genuinely needed. This makes the NCB Protector a practical solution for maintaining cost efficiency in car insurance while safeguarding financial benefits.

The NCB Protection Cover add-on from TATA AIG is beneficial to all categories of vehicle owners because any car or bike can be susceptible to damage, theft or other risks at any time. However, if you meet any of the conditions mentioned below, the add-on cover is especially important for you:

• If you own an expensive four-wheeler, it may be expensive to replace it yourself in case it gets stolen.

• If you reside in a location where your vehicle is exposed to calamities such as floods, earthquakes, riots, cyclones, etc., the chances of raising a claim are high.

• If you have owned a vehicle for more than 2 years and do not want to lose the no-claim bonus benefit.

While the NCB is a beneficial feature, there are specific scenarios where its applicability is limited or the NCB cover cannot be utilised.

When NCB is Applicable

• The NCB is offered during the renewal of a car insurance policy, either online or offline, provided no claims were raised during the previous policy year.

• It is a progressive reward, with the discount increasing each year for up to five consecutive claim-free years, potentially reducing the premium by as much as 50%.

• The NCB can significantly lower the financial burden of insurance premiums, encouraging policyholders to avoid unnecessary claims.

When NCB Is Not Applicable

If the motor insurance policy expires and is not renewed within the 90-day grace period, the NCB from the previous policy will be forfeited.

• The NCB must be purchased at the time of buying or renewing the policy. It cannot be added or removed midterm.

• If the insurer detects a fraudulent claim or misrepresentation of facts regarding the incident, the NCB benefit will be cancelled, and the add-on cover may also be invalidated.

Also Read: How Can You Use NCB of an Old Car to Reduce the Policy Premium of a New Car

The no-claim bonus is granted to the policyholder and not the insured vehicle. Therefore, it can be transferred to a new insurance policy from a different insurer.

The NCB transfer process from an old vehicle insurance plan to a new insurer is simple and easy. The process may differ if you buy the insurance plan online, offline or through an insurance agent, but the basic procedure remains the same.

If you buy the new four-wheeler insurance policy online, provide correct information to the new insurance company about the no-claim bonus earned by you on your previous motor insurance plan, and give details about the previous insurer and the policy number.

Since the no-claim bonus is provided as per the IRDAI guidelines, the new insurer will transfer it from your earlier insurer to your new insurance policy.

If you plan to buy the car insurance with No Claim Bonus offline, you will require a no-claim bonus certificate issued by your previous insurer to transfer it to the new policy. Here is how you can go about it:

• Inform your previous insurer and request a no-claim bonus transfer.

• Submit all the relevant documents regarding your previous vehicle insurance policy and other personal documents required.

• You will receive a no-claim bonus certificate from the previous insurer.

• Present this no-claim bonus certificate to the new insurer as proof.

• The new insurer will transfer the NCB benefits from your previous insurance policy to the new one.

Submit the following documents to the insurer to get your no-claim bonus transferred to the new motor insurance policy:

• A no-claim bonus transfer application form

• Copy of the vehicle insurance policy

• Sales agreement (Form 29 and Form 30)

• Copy of the booking receipt in case of purchase of a new vehicle

• Copy of the transferring old registration certificate or ownership transfer certificate in case of sale of old vehicle

• Copy of the delivery note in case of sale of old car

A no-claim bonus is a reward provided by insurers to motor vehicle insurance policyholders for being responsible drivers, maintaining their vehicles well during the policy year, and not filing a claim against their motor insurance plan.

You can enjoy an incremental no-claim bonus, which can result in up to a 50% discount on your policy premium if you do not file a single claim on your policy.

However, there may be a situation where filing a claim is necessary. Therefore, it is advisable to add an NCB Protection Cover add-on with the motor insurance policy, which lets your no-claim bonus stay unaffected even if you file one claim during the policy year.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.