What is NCB in car insurance

NCB in car insurance stands for No Claim Bonus. It is a discount or reward given to policyholders by the insurance company for not making any claims during the policy year. The discount is typically offered as a percentage on the premium for the next policy renewal.

The NCB increases with each consecutive claim-free year, often ranging from 20% to 50% depending on the number of claim-free years. However, if the policyholder makes a claim, the NCB is usually reduced or forfeited. The bonus is a way to reward safe driving and reduce the overall cost of insurance for responsible drivers.

Here are 10 key points explaining NCB (No Claim Bonus) in car insurance:

Definition: NCB is a discount or bonus provided by an insurer to policyholders who don't make any claims during the policy period.
Discount on Premium: The NCB offers a percentage discount on the premium for the next year’s policy renewal.
Claim-Free Years: The bonus typically increases with each claim-free year. For example, it may start at 20% and can go up to 50% depending on the insurer and the number of years without a claim.
Transferable: In many cases, the NCB can be transferred when switching between insurance companies or changing vehicles.
Reduction or Loss: If the policyholder makes a claim during the policy year, the NCB is usually reduced or lost altogether.
Claim-Free Discount: The more claim-free years you have, the higher your NCB discount will be, which results in lower insurance premiums.
No Claim Bonus Protection: Some insurance policies offer an option to protect your NCB, allowing you to make one claim without losing the bonus.
Eligibility: To be eligible for an NCB, the policyholder must not have made any claims during the policy period, whether for accidents, theft, or damages.
Valid Only for Comprehensive Insurance: NCB generally applies to comprehensive car insurance policies and not to third-party insurance policies.
Impact on Renewal: The NCB is applied at the time of renewal and can significantly lower the cost of the insurance premium, making it a valuable benefit for safe drivers.