No Claim Bonus: how it works and how not to lose it
NCB can cut your motor premium substantially after claim-free years. Here is how it builds, how a small claim can wipe it, and how to keep it.
Key takeaways
- NCB is a discount on own-damage premium that grows with each claim-free year, up to 50%.
- One claim usually resets NCB to zero — so small claims can cost more than they pay.
- NCB belongs to you, not the car; carry it to a new car, and don’t let the policy lapse.
The No Claim Bonus (NCB) is the reward for not claiming — and over a few years it becomes one of the biggest levers on your motor premium. Understanding it changes how you decide whether to even file a small claim.
How it builds
For every claim-free policy year, your NCB steps up, discounting the own-damage part of next year's premium. It typically starts around 20% after the first claim-free year and climbs each year to a maximum of 50%. That is a large, compounding saving on renewal.
How one claim wipes it
Here is the catch: making any own-damage claim usually resets your NCB to zero at the next renewal. So a small claim costs you twice — the loss of the accumulated discount can easily exceed the claim itself.
Illustrative example (not a quote): you're at 50% NCB and dent a bumper. Claiming ₹8,000 could reset your NCB, adding far more than ₹8,000 to your premiums over the next couple of years. Paying the ₹8,000 yourself and keeping the NCB is often the cheaper choice.
Rule of thumb: for small, affordable repairs, pay out of pocket and protect your NCB. Save claims for damage large enough to be worth the reset.
NCB belongs to you, not the car
Two things people get wrong:
- It's yours, not the vehicle's. When you sell your car and buy a new one, you can transfer your NCB to the new car's policy. Get an NCB retention letter from your insurer.
- Don't let it lapse. If your policy lapses beyond the allowed grace window, you can lose accumulated NCB. Renew on time, every time.
NCB protection add-on
Many insurers offer an NCB protection add-on that lets you make a limited number of claims without losing your bonus. On a high NCB, it can be worth the small extra premium — a broker can tell you when the maths favours it.
A Trustner broker tracks your NCB across renewals and vehicle changes, retains it correctly when you switch, and advises when a claim is worth making versus when paying yourself protects a bigger saving.
This guide is general educational information, not personalised advice. Policy terms vary by insurer and change over time — always read the policy wording. For cover matched to your situation, request a free review from a licensed Trustner broker.