No Claim Bonus (NCB) in Car Insurance
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What is No Claim Bonus (NCB) in car insurance?
No Claim Bonus (NCB) in car insurance is a reward that insurers provide to policyholders who do not file any claims during a policy year. It takes the form of a discount on the own-damage (OD) premium at the time of renewal, and the discount increases with each consecutive claim-free year. NCB is mandated and governed by IRDAI and follows a standardised slab structure across all motor insurers in India. It is important to note that NCB applies only to the own-damage component of your car insurance premium. The third-party premium, which is fixed by IRDAI based on engine capacity, is not affected by NCB. NCB is linked to the policyholder, not the vehicle, which means you can transfer your NCB when you buy a new car or switch insurers.
With Zurich Kotak car insurance, you can easily retain and transfer your NCB while enjoying a smooth renewal and claims process, helping you make the most of your accumulated savings.
How is NCB in car insurance calculated?
NCB is calculated as a percentage discount on the own-damage premium based on the number of consecutive years without a claim. The IRDAI-prescribed NCB slab structure is as follows.
Claim-Free Years | NCB Discount (%) |
After 1 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 or more consecutive claim-free years | 50% |
For example, if your OD premium is ₹10,000 and you have 3 consecutive claim-free years, the 35% NCB discount reduces your OD premium to ₹6,500 at renewal. The discount is applied before GST is calculated.
Benefits of No Claim Bonus in Car Insurance
No Claim Bonus offers clear financial and practical advantages, making it a valuable benefit for careful and claim-free drivers over time.
• Progressive premium savings: The NCB discount increases each year you remain claim-free, from 20% after the first year to a maximum of 50% after five years. Over time, this translates to significant savings on your car insurance renewal cost.
• Reward for safe driving: NCB directly rewards responsible driving behaviour and careful vehicle use, creating a financial incentive to avoid minor claims that could reset the discount.
• Transferable between vehicles: NCB is linked to the policyholder, not the car. When you sell your old car and buy a new one, you can transfer the accumulated NCB to the new car’s policy.
• Portable across insurers: IRDAI allows NCB portability, meaning you retain your discount even when switching to a different insurance company at renewal.
• Builds long-term value: A 50% NCB after five years effectively halves your OD premium, compounding savings year after year as long as you remain claim-free.
How does NCB work in car insurance?
The No Claim Bonus operates on a straightforward principle: the fewer claims you make, the higher your NCB. When you buy a car insurance policy from Zurich Kotak General Insurance and complete a policy term without filing a claim, you earn a certain percentage of NCB. This discount is applied to your premium during renewal.
Here's how the NCB accumulates:
· After 1 claim-free year – 20% NCB
· After 2 consecutive claim-free years – 25% NCB
· After 3 consecutive claim-free years – 35% NCB
· After 4 consecutive claim-free years – 45% NCB
· After 5 consecutive claim-free years – 50% NCB
If you make a claim during the policy year and don’t have an NCB Protection Cover, your No Claim Bonus resets to zero. However, with Zurich Kotak General Insurance, you can purchase an NCB Protection Cover to safeguard your discount even after making a claim.
Why is NCB so important in car insurance?
The importance of NCB in car insurance cannot be overstated. It acts as a reward system for responsible vehicle ownership and offers significant financial benefits. Here's why No Claim Bonus is essential:
1. Cost Savings: The most obvious advantage is the reduction in your car insurance premium. A 50% NCB means you pay only half of the premium cost, which can lead to substantial savings over time.
2. Encourages Safe Driving: Knowing that making a claim can affect your NCB motivates drivers to be more cautious, leading to safer roads and fewer accidents.
3. Transferable Savings: Since NCB is transferable, you can carry over your discount when switching insurers or buying a new car, ensuring your savings continue uninterrupted.
4. Boosts Policyholder Loyalty: The cumulative nature of NCB encourages policyholders to stick with their insurer, fostering long-term relationships.
How To Check NCB In Car Insurance
You can easily check your No Claim Bonus (NCB) status using any of the following methods:
● Online: Log in to your Zurich Kotak customer account on their website to view your current policy details.
● Policy Documents: Check your previous policy papers or renewal notice, where your NCB percentage is clearly mentioned.
● Customer Support: Call Zurich Kotak at 1800-2120, email care@zurichkotak.com, or get in touch with your insurance advisor for assistance.
● Mobile App: If you’re a digital policyholder, you can also check your NCB through the Zurich Kotak mobile app.
● Renewal Quotation: Your eligible NCB discount will be automatically applied when you receive your renewal quotation.
NCB Protection Cover (NCB Protector Add-On)
NCB protection cover helps you keep your hard-earned discount even if you need to make a claim during the policy period.
What is NCB protection cover?
NCB protection cover is an optional add-on that allows you to file a limited number of claims (usually one or two per policy year) without losing your accumulated NCB discount. Without this add-on, filing even a single claim resets your NCB to zero at the next renewal.
How NCB protector works
When you have NCB protection and file a claim during the policy year, the insurer processes the claim normally but does not reset your NCB at renewal. The protection typically allows one claim per year without NCB impact.
Who should buy NCB protection cover?
NCB protection is most valuable for policyholders who have accumulated a high NCB (35% to 50%) over several years and want to safeguard that discount. It is also useful for drivers in high-traffic urban areas where the risk of minor accidents is higher, and for policyholders who want the flexibility to file claims for genuine damage without worrying about premium increases.
How much does NCB protection cover cost?
The premium for NCB protection is typically 5% to 10% of the OD premium, depending on the insurer and the NCB level being protected. For a policyholder with a ₹15,000 OD premium and 50% NCB, the protection add-on may cost ₹750 to ₹1,500 per year, which is significantly less than the savings at risk if the NCB were to be reset.
When is the No Claim Bonus (NCB) terminated?
The No Claim Bonus (NCB) is a valuable reward offered by Zurich Kotak General Insurance for safe and responsible driving. However, there are certain scenarios where the NCB can be terminated:
1. Claim Filed During Policy Term: If you make a claim for any damage or loss during the policy period, your accumulated NCB will be forfeited for the next renewal.
2. Policy Lapse: If you fail to renew your policy within 90 days of its expiry, your accumulated NCB will be terminated and cannot be reinstated.
3. Transfer Without Endorsement: When selling your vehicle, if the NCB is not transferred to your new vehicle or carried forward via proper endorsement, it may be terminated.
To maintain your NCB, consider opting for Zurich Kotak’s NCB Protection Add-On, which allows you to make a certain number of claims without losing your bonus.
How does NCB function if a vehicle is stolen or incur accident?
In unfortunate situations like an accident or theft of your vehicle, here’s how Zurich Kotak General Insurance handles the No Claim Bonus (NCB):
· Accident: If a claim is filed for repairs or damages resulting from an accident, the NCB will be forfeited during the next policy renewal unless you have an NCB Protection Add-On.
· Theft: In case of a total loss due to theft, the NCB accumulated on the stolen vehicle will be terminated. However, Zurich Kotak General Insurance allows the transfer of the NCB to a new vehicle if purchased within the stipulated time frame.
· No Claim Made: If you choose to cover minor damages out-of-pocket and avoid filing a claim, your NCB will remain intact.
Tip: Investing in the NCB Protection Add-On ensures that your NCB remains unaffected even after certain claims, offering you peace of mind and savings on future premiums.
How to Transfer NCB (Detailed Steps)
Transferring your No Claim Bonus (NCB) is a simple process that allows you to retain your earned discount even when you change your car or insurer.
When can you transfer NCB?
You can transfer NCB when selling your old car and buying a new one, when switching to a different insurance company at renewal, or when the existing policy expires and you purchase a new one within the grace period.
Step-by-step NCB transfer process
Follow these simple steps to transfer your NCB smoothly to your new policy.
Request an NCB certificate from your current insurer. This document confirms your claim-free history and NCB percentage.
Provide the NCB certificate to the new insurer at the time of purchasing or renewing the policy for the new car.
The new insurer verifies the NCB details with your previous insurer.
Once verified, the NCB discount is applied to the OD premium of the new policy.
Documents required for NCB transfer
Keep these documents ready to ensure a hassle-free NCB transfer process.
• NCB certificate from the previous insurer.
• Previous policy copy or policy number.
• Vehicle registration certificate (RC) of the new car.
• Identity proof and address proof of the policyholder.
• No-claim declaration or self-declaration form (if required by the new insurer).
NCB Certificate: What It Is & How to Get It
An NCB certificate is a document issued by your insurer that confirms your claim-free history and the NCB percentage you are entitled to. You need this certificate when switching insurers, transferring NCB to a new car, or providing proof of your claim-free record. To obtain it, contact your current insurer’s customer support, request the certificate by providing your policy number, and the insurer will issue it within a few working days.
Important NCB rules as per IRDAI
Understanding the key NCB rules set by IRDAI helps you make better decisions and avoid losing your earned benefits.
● NCB applies only to the own-damage premium. The third-party premium is not affected.
● NCB is earned per policy year. A single claim during the year resets the NCB to zero (unless protected by an add-on).
● NCB is linked to the policyholder, not the vehicle. It can be transferred to a new car or a new insurer.
● The grace period for retaining NCB during policy renewal is typically 90 days. If the policy lapses beyond this period, the NCB is lost.
● NCB can be accumulated up to a maximum of 50% after five consecutive claim-free years.
● IRDAI standardises the NCB slab structure, ensuring uniformity across all motor insurers in India.
NCB vs Zero Depreciation: Which Add-On Should You Choose?
Choosing between NCB protection and zero depreciation depends on your priorities, whether you want to protect your discount or reduce claim expenses.
Parameter | NCB Protection | Zero Depreciation |
What it does | Protects your accumulated NCB discount after a claim. | Waives depreciation deductions on replaced parts during claims. |
Who benefits | Policyholders with high NCB (35%+) who want to protect savings. | Owners of new or high-value cars where parts are expensive. |
Premium impact | 5% to 10% of OD premium. | 15% to 30% of OD premium. |
Can they be combined? | Yes, both can be active on the same policy simultaneously. | Yes, both serve different purposes and complement each other. |
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Frequently asked questions No Claim Bonus in car insurance
The cost depends on your vehicle type, IDV, and accumulated NCB. It usually adds a small premium but can provide long-term savings by allowing you to retain your NCB after a limited number of claims.
NCB is calculated as a percentage discount on your own damage premium for each claim-free year, typically starting at 20 percent and going up to 50 percent over consecutive years.
No. NCB applies only to the own damage portion of your car insurance and does not affect mandatory third-party premiums.
You can earn up to 50 percent NCB after five consecutive claim-free years with Zurich Kotak General Insurance.
IDV is the current market value of your car and represents the maximum claim amount. NCB is the discount you receive for maintaining a claim-free policy.
No. Claims made for add-ons such as Roadside Assistance or Consumables Cover do not affect your NCB unless they involve major repairs under the own damage section.
This is the initial discount you receive on your own damage premium after your first claim-free policy year, marking the start of your NCB accumulation.
NCB gets cancelled if you make any claim during the policy period, as it is meant to reward claim-free driving. However, it can be retained if you have opted for an NCB protection add-on.
Changing your insurer does not affect your NCB because it is linked to you as the policyholder, not the insurer. You can transfer it by providing your previous policy details or NCB certificate.
No, you will not lose your NCB when buying a new car. The bonus is tied to you, not the vehicle, so it can be transferred to your new car insurance policy.
Yes, NCB reduces your own damage premium significantly. It acts as a discount for maintaining a claim-free record, helping you save on renewal costs each year you do not raise a claim.
If you make a claim, your accumulated NCB usually resets to zero at the next renewal. However, if you have an NCB protection add-on, you may retain the benefit despite making a claim.
You can get your NCB certificate from your insurer when you renew, switch insurers, or cancel your policy. It serves as proof of your claim-free history and helps transfer your bonus.
The maximum NCB generally reaches up to 50% after five consecutive claim-free years. Beyond this, the discount does not increase further, even if you continue without making any claims.
NCB usually remains valid for up to 90 days after your policy expires. If you renew within this period, you can retain your bonus; otherwise, it may lapse completely.
Any policyholder with a comprehensive or own damage car insurance policy who has not made any claims during the policy term is eligible to receive a no claim bonus at renewal.
There are two main types: standard NCB, which offers a discount for claim-free years, and NCB protection add-on, which allows you to retain your bonus even after making limited claims.
Yes, NCB can expire if you do not renew your policy within the allowed grace period, usually 90 days. After this, your accumulated bonus is lost and cannot be recovered.
You can protect your accumulated NCB by purchasing an NCB protection add-on. This allows you to make a limited number of claims without losing your bonus during the policy period.
No, NCB is calculated only on the own damage portion of your premium. It does not apply to third-party liability charges or the cost of add-ons included in the policy.
NCB lapses if you fail to renew your policy within 90 days of expiry or if you make a claim without having NCB protection. Once lapsed, the accumulated benefit is lost.
No, NCB and its protection add-on are specific to each vehicle and policy. You need to purchase separate NCB protection covers for each car to enjoy the benefit individually.
Yes, NCB is not applicable to third-party insurance. It applies only to the own damage component of a comprehensive or standalone own damage car insurance policy.
In case of total loss or theft, the NCB on that policy is usually lost. However, you may be able to transfer your NCB to another vehicle if you purchase a new policy.
After three consecutive claim-free years, you can typically get around a 35% discount on your own damage premium, helping you significantly reduce your insurance renewal cost.
NCB increases each year up to a maximum of five consecutive claim-free years. After that, it is capped at the highest discount level, usually 50%, and does not increase further.
You can buy NCB protection cover as an add-on while purchasing or renewing your comprehensive car insurance policy. It is offered by most insurers at an additional premium.
Policyholders with an NCB above 35 percent, owners of luxury cars, or anyone with a long claim-free history may consider the add-on to maintain their discount even after minor claims.
By opting for the NCB Protection Add-On, you can file a limited number of claims during the policy term without losing your accumulated bonus. The exact number depends on your policy terms.
After completing your first claim-free policy year, you will receive a 20 percent discount on your own damage premium at renewal.
