NCB (No Claim Bonus): Meaning, Example and How It Works in India
What does NCB (No Claim Bonus) mean?
No Claim Bonus, abbreviated NCB, is a discount granted on the Own Damage portion of motor premium for policy years with no claim. The slab in India is 20%, 25%, 35%, 45% and 50% over five consecutive claim-free years. It is linked to the policyholder, not the car.
For most Indian car owners, knowing NCB (No Claim Bonus) matters at the moment of buying a policy or filing a claim. The term shows up on the policy schedule, on the claim form and on the renewal proposal, often in fine print that first-time buyers do not notice until something goes wrong.
HiZuno publishes this glossary so that customers and small-business owners can decode the language of motor insurance in plain English. As of 2026, every entry reflects current IRDAI and MoRTH rules and the prevailing practice across providers in India.
How NCB (No Claim Bonus) applies in India
Per the Indian Motor Tariff, NCB starts at 20% after one claim-free year and tops out at 50% after five. NCB is transferable to a new car using an NCB Retention Letter. A lapse beyond 90 days resets the bonus to zero.
A real-world example
A Bangalore owner with 4 claim-free years gets 45% NCB on Rs 12,000 OD premium, saving Rs 5,400. After one more claim-free year, the saving rises to Rs 6,000 at the 50% peak.
Common misconceptions
Buyers think NCB compounds without effort. NCB only accrues if the policy is renewed continuously and remains claim-free. Even one claim resets the bonus.
Why NCB (No Claim Bonus) matters for the consumer
NCB is the biggest controllable discount. Five years of claim discipline can cut premium by half. Knowing the rules helps you protect the bonus.
Read your policy schedule line by line at issue and at renewal. If a line references NCB (No Claim Bonus), confirm the figures match what you discussed during the quote.
How to handle NCB (No Claim Bonus) in practice
A simple, repeatable approach helps you stay in control whenever NCB (No Claim Bonus) shows up in your policy paperwork or claim conversation.
- Confirm the basics: verify that NCB (No Claim Bonus) is reflected correctly on the policy schedule before you pay premium.
- Cross-check with IRDAI norms: the regulator publishes the framework that governs NCB (No Claim Bonus), so compare what your provider has filed.
- Read the policy wording: the binding contract spells out limits, exclusions and conditions in detail beyond the marketing summary.
- Document everything: keep digital copies of the policy, RC, driving licence and KYC, since most disputes turn on documentation.
- Ask before you assume: a 60-second call to the provider clarifies whether NCB (No Claim Bonus) applies to your specific situation.
Related glossary terms
Frequently asked questions about NCB (No Claim Bonus)
Sources: Content based on information published by IRDAI, ARAI, MoRTH, Parivahan Sewa, General Insurance Council (GIC), and other relevant regulatory or industry sources, as applicable.
Disclaimer: Premiums and amounts shown are indicative and approximate reference figures only; the actual figure varies with the vehicle's age, No Claim Bonus, geography (RTO zone) and various other parameters. The company offers products under Motor, Health, and Commercial Insurance. For risk factors, terms and conditions, exclusions, and product features, please read the policy wording, sales brochure, and prospectus carefully before concluding a sale. Zuno General Insurance Limited | IRDAI Reg. No. 159 | CIN: U66000MH2016PLC273758 | Registered Office: 2nd Floor, Tower 3, Wing B, Kohinoor City Mall, Kohinoor City, Kirol Road, Kurla (West), Mumbai 400070 | Toll-Free: 1800 12000 | Landline: 022 42312000 (Call charges applicable) | Website: www.hizuno.com | Email: support@hizuno.com.
Section 41 of the Insurance Act, 1938: No person shall allow or offer to allow, directly or indirectly, as an inducement to any person to take out, renew, or continue an insurance policy in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out, renewing, or continuing a policy accept any such rebate.