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No Claim Bonus (NCB) in Car Insurance
How Does NCB in Car Insurance Work?
To understand what NCB is in insurance, it is essential that you know how it works. If you look at your car insurance policy papers carefully, you will see that the own damage component makes up the lion’s share of your insurance costs. Getting a discount on this amount adds up to substantial savings over the long term.
Simply put, car insurance NCB is a great feature that can significantly reduce your expenses on your comprehensive car insurance. Let us take a look at this example to understand how NCB works.
Revathi Nair purchased car insurance in January 2023. Let’s see how her NCB worked.
| Month | Details |
|---|---|
| January 2020 | Revathi Nair did not make any claims |
| January 2021 | She received a discount of 20% on her own damage premium, saving her a significant amount. |
| January 2022 | Her NCB has now increased to 25% |
| March 2022 | While parking her car, Revathi accidentally scraped the bumper. But, because it was a small claim, Revathi did not raise it, making 2025 another claim-free year. |
| January 2023 | Revathi has now accrued 35% NCB |
| January 2024 | Her NCB has now increased to 45% |
| January 2025 | Her accrued NCB reached 50%, which can be kept till she makes a claim. |
In case Revathi raises a claim, her NCB would then come down to zero; however, another claim-free year will put her back on track.
Simply put, the No Claim Bonus is your reward for responsible driving. When you renew your policy, your insurer offers you a discount on the own damage component of your insurance premium. This discount begins with 20% for the first claim-free year and increases cumulatively with each claim- free year until you reach five consecutive claim-free years, at which point your NCB gets capped at 50%.
Keep in mind that NCB is applicable when you have either a standalone OD car insurance or a comprehensive policy. NCB does not apply when you only have the mandatory third party cover for your car. With third party car insurance, as you would know, only third-party liabilities are covered.
Benefits of NCB in Car Insurance
| Benefit | Description |
| Reward For Maintaining Your Car | NCB is an incentive from insurer that encourages you to be a responsible driver. If you face zero accident, you can get discount during car insurance renewal. |
| Tied to the Owner, Not the Vehicle | A no claim bonus is earned by the vehicle owner. This means that even if the policyholder sells his/her car, the no claims bonus stays with them and becomes applicable to the next car they purchase. |
| Great Savings on Premiums | A no claim bonus allows you to save between 20 to 50% on your car insurance premium depending on the number of years you go without making an insurance claim. |
| Transferable at Your Convenience | NCB is easily transferable in case you shift from one insurer to another. You simply need to obtain your NCB certificate from the previous insurer and submit it to the one you’re switching to. |
How is NCB in Car Insurance Calculated?
NCB is calculated on the amount of your car insurance premium starting from the second year. It usually begins with a 20% discount on the premium and subsequently goes up with each consecutive claim-free year. It needs to be noted however that the NCB is calculated only on the own damage component of the premium and not on the third-party component. You can reach out to our team at HDFC ERGO to know more details about this.
| Claim-free Year | NCB Discount |
| After 1st claim free year | 20% |
| After 2 consecutive claim free years | 25% |
| After 3 consecutive claim free years | 35% |
| After 4 consecutive claim free years | 45% |
| After 5 consecutive claim free years | 50% |
As can be seen from the table above, an NCB leads to great savings over time for car owners.
Let’s continue with Revathi’s example. Suppose Revathi pays an insurance premium of ₹20,000 for her car, of which ₹18,000 is the own-damage component, and she has not made any insurance claim for five consecutive years. She becomes eligible for a discount of up to 50%, which is a whopping ₹9,000.
Also Read : Know about NCB Calculation during car insurance renewal
When Is The No Claim Bonus Terminated?
No Claim Bonus (NCB) can get terminated under various circumstances. As a policyholder, there are numerous things which you have to keep in mind to keep your NCB benefits active.
If the insured person claims the policy term, the No Claim Bonus privilege will be withdrawn or terminated by the insurer. For example, for raising a claim to cover damages caused to the car due to an insured peril, there will be no claim bonus termination. However, if the policyholder has the No Claim Bonus Protection Cover, their NCB benefits will remain active. In addition, if the policyholder fails to renew their car insurance within 90 days or three months from the date of expiry of the car insurance policy, then here, too, the NCB will be terminated by the insurer.
Suppose the policyholder allows the policy to lapse, irrespective of the accumulation of claim-free years and eligibility for premium discounts of the car insurance policy. In that case, the car insurer will withdraw the No Claim Bonus. Lastly, if the policyholder fails to transfer the No Claim Bonus to another insurer or a new car insurance policy within a certain period, then the No Claim Bonus will be withdrawn by the car insurer.
Can No Claim Bonus be Protected?
Losing out on your hard-earned NCB can be disappointing, especially when the damage caused was not your fault. But worry not, not raising a claim is not the only way you can protect your NCB.
Even in the event of a claim, you can safeguard the accumulated NCB in car insurance by opting for the NCB Protector add-on. When you include the No Claim Bonus Protector add-on in your HDFC ERGO comprehensive car insurance policy, you can make up to 3 claims in a policy year, and still not lose the acquired NCB.
Make sure to read the policy document carefully to understand the inclusions and exclusions of the NCB protection in car insurance.
How to Claim NCB Benefits?
Making a claim for the no claim bonus in car insurance is quite simple. At the time of policy renewal, when you fill in your policy details, the HDFC ERGO car insurance portal will ask you if you made a claim in the previous year or to enter your eligible no claim bonus in car insurance.
On the basis of the claim-free years that you have had, you can fill in the percentage of NCB you are eligible for. Once you submit all the required details, your insurer will quickly verify them and offer you the applicable discount.
While HDFC ERGO offers a paperless renewal, you may be asked to submit a No Claim Bonus Certificate when you request an NCB transfer.
How is Claim NCB used during Claim Settlement?
NCB in car insurance comes into play during renewal, as it offers discounts on the upcoming premium. At the time of claim settlement, NCB in car insurance doesn’t have any direct impact. Just bear in mind that making a claim can eliminate your NCB. If you wish to preserve the car insurance no claim bonus, then opting for the NCB Protection cover add-on can be helpful.
NCB if the Vehicle is in an Accident or Stolen
Only when you understand the NCB in car insurance meaning, would you be able to understand its applicability?
NCB in Case of Accidents
NCB in Case of Stolen Car
How to Transfer NCB When You Buy A New Car
An NCB is easily transferable from your old car to a new car. This is because the NCB is tied to the owner and not the vehicle. All you need to do is follow these simple steps:
Submit an NCB Transfer Request
Obtain Your NCB Certificate
Apply for New Insurance Policy
Terms and Conditions of No Claim Bonus Transfer
In order to claim ncb in insurance, you have to keep in mind following terms and conditions
1. When buying a new car and selling an old vehicle, ensure you transfer no claim bonus to the new vehicle. At the time of the transfer process, the insurer will issue a certificate. However, this decision could be at the discretion of the insurance company.
2. You cannot buy no claim bonus with third party insurance cover. It is only available with your own damage cover or comprehensive policy.
How To Check NCB In Car Insurance
You can check the applicable NCB by referring to the no claim bonus slabs. The NCB will be mentioned on the webpage during the online car insurance renewal process. If you renew your car insurance policy with a different insurer, you must mention the NCB earned in your previous policy. You can also view the NCB calculation in your policy document post-policy purchase.
To understand the working of a no claim bonus calculator, refer to the following table:
| Age of policy | No Claim Bonus Percentage |
| After year one of no claim | 20% |
| After two consecutive years of no claim | 25% |
| After three consecutive years of no claim | 35% |
| After four consecutive years of no claim | 45% |
| After five consecutive years of no claim | 50% |
Documents Required for Smooth Transfer
Your car insurance policy copy and must be valid.-of-your-vehicle.svg?sfvrsn=6fd8e841_2 "Step 2- A copy of the registration certificate (RC) of your vehicle.")
A copy of the registration certificate (RC) of your vehicle.
A valid photo ID.
How To Ensure You Do Not Lose NCB During Motor Insurance Policy Renewal?
The policyholder can transfer the no claim bonus from an existing policy to a new one, irrespective of whether you are renewing the policy with the same insurer or the other. However, renewing your insurance policy before it expires is important to retain the no claim bonus benefit. To avail no claim bonus benefit, ensure that you renew your car insurance within 90 days of the previous policy’s expiry.
Steps to Renew a Motor Insurance Policy Before Expiry
• Visit our website and click on the car insurance.
• Enter your vehicle registration number and select the ‘Renew’ option.
• Fill out your vehicle details. Also, add-ons like zero depreciation and ncb protection cover along with the car insurance plan.
• Get an instant car insurance premium quote.
• Proceed with the payment online.
• Once renewed, we will email the car insurance policy to your authorised email ID.
Important Things to Know about NCB in Car Insurance
At HDFC ERGO, we strive to ensure that our customers are well aware of the inclusions and exclusions of all insurance plans that we offer. Understanding the plan helps you in buying the right coverage and also making the right claims. When you are learning about what no claim bonus is, it is also essential to keep the following things in mind.
NCB offers discounts on own damage
NCB is transferable
NCB can be nullified
NCB is capped at 50%
NCB is available with OD cover
HDFC ERGO Car Insurance Add-ons
When it comes to car insurance, spending a small amount more for car insurance add-on coverage can prove to be the best choice because it completely protects your family and your precious car. HDFC ERGO provides you with comprehensive insurance policies with appealing features and budget-friendly pricing. In all emergency situations, we cooperate with you to maintain the safety of your family and your car. In all emergency situations, we cooperate with you to maintain the safety of your family and your car.
As per this add-on, HDFC ERGO is responsible for paying the complete claim without making any adjustments for the depreciation that would be applied to the damaged parts of a partial loss claim.
If there is an accident that damages the car, one of the biggest concerns when choosing insurance is that you won't be qualified for a no-claim bonus. However, this cover ensures that you can take advantage of the NCB benefit for being a careful driver.
In the event of a car breakdown, the insurance provider will offer a variety of services around-the-clock, including fueling, towing, scheduling a mechanic, changing a flat tyre, and more.
Under this add-on, we offer you 25% of the basic own damage premium if you drive less than 10,000 kms in a year. It is available at the end of a policy year.
With this add-on cover the insurer will cover expenses for replacing the tyres and tubes of the insured vehicle. This coverage is applicable when the insured vehicle tyres burst, puncture, or face a cut during an accident.
By investing in a return to invoice cover, you can make sure that, rather than receiving the insured declared value in the event of car loss or theft, you instead receive the original invoice value, which includes the registration fee and taxes. This add-on policy covers the gap between the approved claim amount and the car's initial purchase price.
Insurance usually does not cover Internal damage to the engine and gearbox; however, this add-on feature guarantees coverage for accidental damage to the engine and gearbox as a consequence of waterlogging or lubricating oil leakage. When driving through flooded areas where harm may occur accidentally, you can be tension free.
This add on cover will help bear the expenses you spend on cabs for your daily commute while your car is getting repaired.
Loss of Personal Belonging add on covers loss of your personal belonging such as cloths, laptop, mobile, vehicle documents like Registration Certificate, Driving License etc.
With this add on cover under the car insurance policy the policyholder get coverage for consumables items like lubricants, engine oil, brake oil, etc.
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Read the Latest Blogs on No Claim Bonus in Car Insurance
Frequently Asked Questions On No Claim Bonus In Car Insurance
● You make an insurance claim within a policy period.
● You fail to renew your policy within 90 days of expiry.
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