We all enjoy receiving discounts on products and services. A discount certainly feels satisfying, akin to a well-earned reward. Were you aware that you can also receive a discount on your car insurance? This discount is referred to as the ‘no claim bonus’ or NCB. The NCB is provided to you by the insurer as a percentage reduction on your insurance premium if you do not file any claims during the insured year. It’s essential to comprehend the NCB calculation in motor insurance if you aim to save money on your premiums.

To gain a clearer understanding of how NCB operates, continue reading.

How is NCB applied to your insurance premium?

The no claim bonus is only accessible to you after you successfully finish the insurance policy year. The discount you receive is predetermined and applies to the premium you will owe for insurance renewal once your current insurance term expires. The insurance provider automatically modifies your premium based on the NCB you have earned. The NCB calculation for car insurance keeps increasing—up to a maximum of 50%—after each consecutive year that passes without you making a claim.
Understanding how NCB is calculated

The NCB percentage is constant and does not fluctuate among insurance providers available in the market today. To assist you in understanding NCB calculation in car insurance renewal, here’s an example. If you complete one year of coverage without filing any claims, you enjoy a 20% discount on the premium you pay when renewing your insurance policy. Therefore, if your initial premium amount is Rs. 1000, at the end of one year without raising a claim, your premium decreases by 20%. Consequently, you would only need to pay Rs. 800 for the renewal of your insurance policy (assuming you are obtaining the same coverage and insurance rates have not been altered).

What are the different slabs of NCB?
The table below illustrates the different slabs of NCB calculation for car insurance –

After the completion of the fifth year, the NCB does not rise and remains at 50%. Numerous insurance providers also provide an NCB calculator to assist you with your car insurance no claim bonus calculation.

Advantages of NCB in car insurance
The NCB has numerous benefits to offer. Let’s explore a few of them –
Promotes safe driving: – If you do not experience an accident, you have no need to file a claim. As a result, the motivation to earn the NCB and pay a lower premium encourages safe driving.

Helps save money: – The NCB continues to grow each year you do not make a claim, and you may find yourself paying significantly less for your coverage over the years.

The gathered NCB is transferable: – The NCB remains unaffected even if you switch your insurance provider at the time of policy renewal.

Disclaimer: To understand risk factors, terms, and conditions in detail, please read the sales brochure thoroughly before making a purchase. *The discount amount will differ based on vehicle specifications and the location of registration.