< Back


What Is No Claim Bonus in Car Insurance

Car insurance is an essential and mandatory investment every car owner must make as it protects the vehicle by covering the damages caused due to accidents, theft, fire etc.

When you purchase car insurance, you pay for the premium, and in return, the insurance company bears the expenses from damage repair to the vehicle as per the policy coverage. Although, the policyholder needs to put a claim in order to receive financial support as per the terms and conditions of the insurance policy.

Car insurance companies offer a unique benefit where policyholders are rewarded for not making a claim in the preceding years, which is called No-Claim Bonus (NCB). NCB is basically a discount provided by the insurance company on the insurance premium that you can avail while renewing your policy for another year. If you do not make any claims for five consecutive years, you can accumulate a maximum of 50% discount on premiums.

NCB can be an attractive point while purchasing a car insurance policy, yet, many policyholders may fail to understand the nitty-gritty of NCB, which may result in not obtaining the full benefit of NCB due to lack of information.

Let’s look at some of the important things about the No Claim Bonus:

There is no NCB on third party cover.

One of the crucial things to understand about NCB is that it is only applicable on the own damage cover and premium. You cannot avail of NCB benefits on only a third-party liability premium and cover. Simply, NCB is not available on third-party only insurance for cars. For example, if you buy only a third-party car insurance policy, you won't be able to get NCB, irrespective of the number of years the policy has been renewed and whether any claims have been made or not.

It is only available on policy renewal.

No Claim Bonus is a reward policyholder gets for not making a claim in a policy year. NCB can only be earned by maintaining a claim-free record for a policy year. You don't get NCB benefits at the beginning of the policy year when you buy the comprehensive car insurance policy. You can only claim a starting NCB of 20% on the first renewal of the policy, given there has been no claim during the past year.

NCB is connected to you and not your car

One of the key factors to remember about NCB is that it relates to you as a policyholder and not with the vehicle. Hence, even if you sell your existing car, and purchase another one, while not making any claims during that period, you get to retain your NCB and carry it forward. In case of switching to another insurer at the time of renewal of the policy, the NCB benefits get carried forward as well.

Making small claims may not be a good idea

You can refrain from making claims every time your car suffers minor damage, as it might save you or benefit you more in a long run. How? Sometimes the amount of NCB benefits you may receive after a claim-free year can surpass the cost of the minor repairs. To check the same, it is advisable to carry out a cost-benefit analysis, as, even if you make a small claim, your NCB can go back to zero.

Hopefully, the above points may give you the much-needed information about NCB and the various factors affecting it, so that you can use it efficiently to your benefit.

Kotak General Insurance offers you various car insurance products and services to protect yourself and your car from the burden of financial loss and damages and fulfil all your car insurance needs.

Related Blogs
Understand Why You Need Road Assistance Cover in Your Car Insurance
Claiming Car Insurance For Car Scratches In India
Benefits of Car Insurance

Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.


Car Insurance Benefits


Benefits of car insurance

A car insurance can help you offset substantial financial loss that you may incur because of damage caused to your car

Add-on covers for Car Insurance


Must have Add On Covers for Car Insurance

A basic comprehensive car insurance covers damage to car, 3rd party liability and theft & loss of vehicle.

Car insurance


Right time to buy vehicle insurance

Buying a vehicle insurance is an important decision and you need to ensure that you make a timely purchase of vehicle insurance



Know How Car Insurance Premium Is Calculated

Car insurance premium calculation is based on various important factors. Learn about these factors.



Rules to follow for safe driving

Know About The Important Road Safety Rules To Follow





Significance of a motor vehicle insurance policy

Learn all the benefits a motor insurance policy has, aside from financial security.



Maintenance tips for car engine

Follow these engine maintenance tips and buy a car insurance with engine protection cover to keep engine secure.

Monsoon Tips Car


Monsoon Tips for Car

Simple tips to help you stay safe and keep your car moving ahead during monsoon.

What is Zero Depreciation Cover


What is Zero Depreciation Cover

Read on to understand what is zero depreciation car insurance cover and how it works.

Questions Regarding Motor Insurance Policies


Questions Regarding Motor Insurance Policies

Essential questions about motor vehicle insurance policies in India.