No Claim Bonus (NCB)
Reward bonus earned for maintaining claim-free policy years.
What is No Claim Bonus (NCB)? (Explained in Simple Words)
No Claim Bonus (NCB) is a financial reward provided by insurance companies to policyholders who do not file any claims during a policy year. In Motor Insurance, NCB offers a direct discount (20% to 50%) on renewal premiums. In Health Insurance, NCB increases the Sum Insured (10% to 150%) at zero extra cost.
Real-Life Example & Practical Scenario
In Motor Insurance: After 5 claim-free years, standard car renewal premium receives a massive 50% NCB discount. In Health Insurance: A ₹10 Lakh plan with Super NCB grows to ₹20 Lakhs cover after 2 claim-free years.
Important Differences & Concept Details
In Motor Insurance, NCB belongs to the policyholder (vehicle owner), not the car. When you sell your old car, you can transfer your 50% NCB to your new car.
Common Traps & Mistakes to Avoid with No Claim Bonus (NCB)
Many policyholders misunderstand this clause until a claim actually occurs. Always verify the exact definitions in your policy wording schedule rather than relying on verbal marketing summaries. Disclose all material facts truthfully at the time of proposal to help ensure smooth claim assessment without non-disclosure issues.
IRDAI Guidelines & Statutory Policyholder Rights
NCB in motor insurance can be transferred across any registered general insurance company upon producing an NCB Reserving Letter.
RakshaPoint IMF Specialist Recommendation
Consider NCB Protect add-on in car insurance so a single minor claim does not wipe out your accumulated 50% NCB discount.
Consumer Checklist Before You Sign
Frequently Asked Questions
Related Insurance Category: Motor Insurance
Explore policy features, benefits, terms, and parameters for this insurance category.
Questions About No Claim Bonus (NCB)?
Speak with an authorized Insurance Sales Person (ISP) at RakshaPoint IMF for objective guidance.