No Claim Bonus in Car Insurance

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No Claim Bonus (NCB) In Car Insurance

What happens when you do not file a claim against your bike/ car insurance policy in a particular year? Does your bike/ car insurance policy go to waste for that year? Not at all!

At Tata AIG, we award you a no-claim bonus (NCB) for every claim-free year on your vehicle insurance policy. The NCB discount results in a lower premium for your vehicle insurance plan.

A no-claim bonus benefits you in multiple ways. Therefore, you must know its working and other aspects in detail. Here’s everything you should know about the no-claim bonus on your vehicle insurance plan.

What is No-Claim Bonus Meaning?

No-claim bonus is a discount or benefit that insurers give policyholders on policy premiums at the time of policy renewal. NCBs are available with various insurance plans, such as no-claim bonus health insurance, no-claim bonus bike insurance, and NCB car insurance.

NCB vehicle insurance is one of the most popular no-claim bonus types, and you can enjoy discounts and benefits from your insurer for being a responsible driver.

You can earn anywhere between 20% to 50% discount over 5 years on your vehicle insurance policy.

How Does No-Claim Bonus Work?

A no-claim bonus has straightforward working. Suppose you are a responsible driver, and you do not file a claim against your vehicle insurance policy during the policy term.

Your policy term is about to get over, and you need to renew it. At this time, your insurer acknowledges that you have been a responsible driver and have not filed for a single claim during the entire policy tenure.

Thus, they reward you with an NCB discount when you renew your vehicle insurance policy for the coming term. The no-claim bonus increases with every claim-free year.

Therefore, suppose you got a 20% discount on the first no-claim year. You may get an additional 5-10% discount for the consecutive no-claim year for up to 5 years. It can accumulate to give you a significant discount in policy premiums for your vehicle insurance.

Features and Benefits of NCB in Car Insurance

Earn a reward for responsible driving: Who does not like a reward? A no-claim bonus is a reward for your safe and responsible driving and good maintenance of your vehicle for the entire year.

If you have not raised a claim against your insurance policy in the entire year, you have not met with any major accident or vehicle breakdown in the period, and you deserve the NCB reward entirely.

Lower policy premium: The no-claim bonus discounts accumulate over up to 5 years. When you renew your motor insurance policy, the NCB discounts give you a significantly high waiver on your policy premium, which results in a cheaper vehicle insurance policy for you.

NCB for policyholders: One of the most significant features of a no-claim bonus is that it is granted to the policyholder and not the insured vehicle. So, you do not have to worry about losing the benefit if you sell your existing car or buy a new one. As long as you regularly renew your vehicle insurance policy, you can continue to enjoy the NCB benefit.

Transferable benefit: The no-claim bonus is a transferable benefit. As stated above, if you buy a new vehicle, the benefit can be transferred to the insurance policy for your new vehicle.

On the other hand, if you sell your vehicle, the no-claim bonus does not go to the new owner and remains with you as long as you pay your policy premiums for your next vehicle on time and renew it before expiry.

Moreover, you do not lose the no-claim bonus for your vehicle if you switch from one insurer to another.

With Tata AIG, even if your vehicle insurance policy has expired, if you renew it within 90 days of its expiry, you get to keep the NCB benefits for the expired policy.

Bike/Car Insurance NCB Rules

While a no-claim bonus is a reward for the policyholder, you must know certain rules to enjoy its benefits completely.

The benefit cap: For every consecutive claim-free year, the percentage of the no-claim bonus increases. It may reach up to 50% over 5 consecutive claim-free years. However, after 5 years, for further claim-free years, the discount will not increase beyond 50%.

No-claim bonus computation: The no-claim bonus is not computed on the entire premium. It is only applicable to the own damage component of your vehicle insurance policy. Therefore, calculating the NCB on the entire policy premium will give you a false figure.

Incorrect NCB declaration: If you make a wrong calculation on the NCB and give a faulty figure at the time of claim filing or policy renewal, your declaration will not be considered, and you will not get the NCB benefit.

What is No Claim Bonus Protection Cover in Car Insurance?

You can enjoy the benefits of a no-claim bonus till you do not file a claim against your vehicle insurance plan during the policy year. However, if you file a claim against your insurance plan, the no-claim bonus benefit ceases to exist. In some cases, it may become necessary to file a claim to cover the damages to your vehicle. It can be disheartening to lose the benefits you accumulated over the year on your vehicle insurance policy for a single claim. Therefore, at Tata AIG, we provide you with the option of a no-claim bonus add-on or protection cover, which is an insurance rider for your vehicle insurance policy.

You can add the no-claim bonus add-on cover to your comprehensive or own-damage vehicle insurance policy for an additional premium. With this insurance rider, you can retain the benefits of your no-claim bonus even if you claim during the policy year. However, note the add-on cover benefit protects your NCB discounts against a single claim during the policy year.

Who Should Opt for a No-Claim Bonus Protection Cover Add-On in Car Insurance?

The no NCB Protection Cover add-in 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 two-wheeler or four-wheeler, which may be expensive to replace by 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., and 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.

When is NCB Add On Cover Not Applicable?

The no-claim bonus insurance rider is the best way to ensure you do not lose your NCB benefit on making an insurance claim. However, there are a few situations when the no-claim bonus add-on cannot be added to a vehicle insurance policy, such as:

Only a single claim will be waived off during a policy year if you have a no-claim bonus add-on with your vehicle insurance policy. If you file multiple claims, you will lose the benefit.

If your motor insurance policy has expired before renewal, you must renew it within 90 days from its expiry date. If you renew the policy after 90 days, you will lose the no-claim bonus benefit from the previous policy.

The no-claim bonus protector cover should be added when buying/ renewing the motor insurance policy. You cannot add or remove it from your insurance plan during the policy midterm.

The insurer may cancel the no-claim bonus benefit if the insured files a fraudulent claim or misrepresents the facts about the mishap or damage.

When Is Insurance In NCB Applicable?

The car insurance no-claim bonus is offered as a reward for not raising any claims in a policy year in the form of a discount on the car insurance premium. It is applicable during car insurance renewal online or offline and when you have not made any claims on your four-wheeler insurance during the past policy year.

The no-claims bonus can significantly reduce the premium for the following year if you have maintained a trend of disciplined driving with no claims for up to 5 years.

Important Things To Know About NCB In Insurance

NCB full form in insurance is referred to as No-Claim Bonus. It is offered to reduce the premium for the subsequent years for not raising the car insurance claims.

  • The NCB insurance can start at 20% and increase by 5% - 10% every year for up to 5 consecutive years.

  • The maximum benefit applicable to NCB car insurance is up to 50%.

  • It can be purchased along with other add-on cover options, such as zero-dep insurance for optimal benefits.

  • You can calculate the no-claim bonus only on the own damage component of the car insurance plan.

  • Car insurance no claim bonus is offered as a reward to you and not your insured car. So, it can be accumulated and transferred to your newly owned car.

  • The car insurance NCB protection cover can be added at the time of purchase or renewal to protect your NCB against one claim made during the previous policy year.

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

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 transfer process of the NCB from an old vehicle insurance plan to a new insurer is a simple and easy one. The process may slightly 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 motor 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.

How to Get a Bike/ Car Insurance No-Claim Bonus Certificate?

If you plan to buy the vehicle insurance plan 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.

Documents Required for Transferring NCB in Car Insurance

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

How to Ensure You Do Not Lose NCB During Motor Insurance Policy Renewal?

For the policyholders’ benefit, the no-claim bonus can be transferred from an existing policy to a new one even when you renew your policy with the same insurer. However, you need to renew your insurance policy before it expires to retain the no-claim bonus benefit.

With us, you can still retain the no-claim bonus benefit if your motor insurance policy expires and you renew it within 90 days of the previous policy’s expiry.

Here is how you can renew your motor insurance policy with Tata AIG before and after its expiry:

Steps to Renew a Motor Insurance Policy Before Expiry with Tata AIG

  • Visit our Motor Insurance page and select the car or bike option according to your vehicle type.
  • Enter your vehicle registration number and select the ‘Renew’ option.
  • Fill out your personal details and vehicle details. Also, add the add-ons you want with the insurance plan, including the NCB Protection Cover add-on.
  • Get an instant vehicle insurance premium quote.
  • If the quote suits you, proceed with the payment online.
  • Once renewed, the car insurance policy will be emailed to your authorised email ID.

Steps to Renew a Motor Insurance Policy After Expiry with Tata AIG

  • Visit our Motor Insurance page and select the car or bike option according to your vehicle type.
  • Enter your vehicle registration number and click on the ‘Renew’ option.
  • Provide all necessary person and vehicle-related details, and choose the NCB Protection Cover and other add-ons that you want.
  • Also, provide the information about any claims made in the previous policy tenure and the date of expiry of the policy.
  • After all the details are submitted, your vehicle insurance premium is generated and displayed on the screen.
  • If the premium quote suits you, complete the premium payment online, and your expired policy will be renewed.
  • Once renewed, the car insurance policy will be emailed to your authorised email ID.

No-Claim Bonus in Third Party Insurance

You can avail of 3 types of motor insurance policy covers; third-party cover, own damage cover, and comprehensive cover.

  • The third-party cover is the basic insurance plan that is a legal mandate for every motorised vehicle.
  • The own damage cover can be taken jointly with a third-party cover to get coverage for your own vehicle and vehicle-owner damages.
  • Lastly, a comprehensive motor insurance policy provides the maximum coverage benefit out of all policy types and covers third-party as well as own damages.

The no-claim bonus discount is granted only on comprehensive and own damage cover insurance policies and not on the third-party motor insurance policy. You cannot buy the No-Claim Bonus Protector Cover along with a third-party motor insurance policy.

Similarly, the benefit is not applicable to any other add-on cover. So if you add or drop any other add-on except the NCB Protect Cover, it will not affect the validity of the no-claim bonus discount you have accumulated.

How to Calculate No Claim Bonus for Car Insurance?

The no-claim bonus benefit helps in reducing the premium for your motor insurance policy at the time of policy renewal. Therefore, it is essential to understand how the no-claim bonus is calculated.


Here is an illustration of how the no-claim bonus for vehicle insurance can be calculated:

Suppose a car has an IDV of ₹8 lakhs in the first year, and its own damage cover premium is ₹24,000. Let us assume the policyholder is entitled to a 20% no-claim bonus for the first claim-free year.

Applying the 20% discount on the premium, he will get a discount of ₹4800. The premium payable on policy renewal for the second year will be ₹19,200.

This bonus will keep increasing for every consecutive claim-free year by a small percentage. For 5 consecutive claim-free years, you can get up to 50% discount on policy premium at the time of renewal.

What Causes The NCB Termination?

The no-claims bonus for your four-wheeler insurance can be terminated in the following scenarios:

  • If you have raised a car insurance claim in the past policy year, the NCB benefit ceases to exist.

  • If your car insurance is expired and you have not renewed it within 90 days of expiry, the NCB will terminate.

  • If you have shifted your car insurance policy to a new insurance provider and not transferred your NCB, it can terminate.

  • If you have purchased a new car and failed to transfer your NCB to your new car insurance policy, it can terminate.

No Claim Bonus if the Car is in an Accident or Stole

In case of an accident: If the insured vehicle meets with an accident and the vehicle owner raises an insurance claim, the entire no-claim bonus accumulated against the policy becomes zero. The entire no-claim bonus accumulated becomes zero, irrespective of the extent of damage or the amount of claim raised by the insured.

However, if another party is at fault and the insurer is able to recover most of the expenses, the policyholder’s no-claim bonus might not be as severely affected.

In case of theft: Similarly, if the insured vehicle gets stolen and the insurer is unable to recover the expenses, the entire no-claim bonus amount is at risk.

If the vehicle owner cancels the insurance claim, the no-claim bonus will be restored to the vehicle insurance policy.

How to Check No Claim Bonus in Car Insurance?

At the time of buying a vehicle insurance policy, you can check the no-claim bonus by referring to the no-claim bonus slabs.

  • When you renew an existing vehicle insurance policy, you can log in to your registered account at the insurer’s website and check the applicable no-claim bonus on your insurance plan.
  • The no-claim bonus calculation is also detailed in the policy document after you buy it.
  • If you opt for offline renewal of your vehicle insurance plan, you can request the insurer or the insurance agent about the applicable no-claim bonus before renewing the insurance plan.

Motor Insurance Add-ons Available with Tata AIG

With Tata AIG, you can get 12 add-ons for your car insurance and 7 add-ons for your bike insurance policy. These add-ons enhance the coverage scope of your vehicle and protect it against additional damages and mishaps not covered under a basic motor insurance plan.

Moreover, our bike or car insurance claim process is hassle-free and transparent to provide convenient and easy claim settlement to our customers.

Wrapping Up

No-claim bonus is a reward provided by insurers to motor vehicle insurance policyholders for being responsible drivers and 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 by not filing 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.

Is it a good idea to add an NCB add-on to my motor insurance policy?

Is it a good idea to add an NCB add-on to my motor insurance policy?


If you own an expensive vehicle or are likely to file a claim against your motor insurance policy, you can consider adding the NCB Protection Cover to your own damage or comprehensive policy to save your NCB from being nullified.

Can I have my no-claim bonus for more than one bike?


Your no-claim bonus will apply only to a single-insured bike/ car. So, if you purchase a new vehicle, you will have to insure it separately and accumulate NCB for it.

Will I lose the NCB if I stop driving?


No, you will not lose the NCB if you stop driving. You will lose it only if you make a claim or do not renew your insurance policy on time.

Will I lose my NCB if I cancel my vehicle insurance?


Yes, if you cancel your vehicle insurance, you will lose your NCB.

What happens if an insured declares an incorrect NCB?


The insurer verifies the customer’s claim history and NCB before approving a claim. Therefore, if someone declares a wrong NCB, he may lose the entire NCB benefit from the insurer.

Can I cash out the NCB on my comprehensive car insurance plan if I do not want to continue with it further?


No, you cannot cash out the NCB as it is a reward granted as a discount on policy premiums at the time of policy renewal.

Can I transfer my car’s NCB to my bike?


No, a car’s NCB can be transferred only to another car, and a bike’s NCB can be transferred only to another bike.

Is the NCB still available if I change the type of car I own?


Yes, the NCB is available even if you change the type of car you own.