No Claim Bonus (NCB) is a discount on own-damage premium that starts at 20% after one claim-free year and rises in slabs to 25%, 35%, 45%, and up to 50% after five consecutive claim-free years. NCB is attached to you as the policyholder, not to your car or insurer — so when you sell your car, you should get an NCB retention certificate from your outgoing insurer (usually valid around 90 days) and use it to claim the same discount on a new vehicle or with a new insurer. The buyer of your old car does not inherit your NCB and starts at 0%, or brings their own NCB from a vehicle they previously owned.
At a glance
| Claim-free years | Typical NCB discount |
|---|---|
| 1 year | 20% |
| 2 years | 25% |
| 3 years | 35% |
| 4 years | 45% |
| 5 years | 50% |
What NCB actually is
No Claim Bonus is a discount applied to the own-damage portion of your comprehensive premium for every consecutive year you don't file a claim. It does not apply to the mandatory third-party premium, which is fixed by IRDAI regardless of your claims record. The discount compounds year over year up to a cap, commonly 50% after five straight claim-free years, which can meaningfully reduce your renewal premium over time.
NCB belongs to the person, not the vehicle
This is the detail most owners get wrong. If you sell your car and buy a new one, your accumulated NCB does not stay with the old car for the new owner — it moves with you to your next vehicle, or to a new insurer if you switch. Conversely, if you sell your car to someone else, that buyer starts their own NCB at 0% unless they already have their own accumulated NCB from a vehicle they previously owned.
How to transfer NCB when you sell your car
- Before or immediately after selling your car, request an NCB retention certificate (also called an NCB certificate) from your current insurer
- This certificate is generally valid for a limited window, commonly around 90 days from your policy's expiry or the sale date — don't let it lapse before buying your next vehicle
- When you insure a new vehicle (or the same vehicle transferred to a family member in specific cases the insurer permits), present this certificate to your new or existing insurer
- The insurer applies your accumulated NCB percentage to the new policy's own-damage premium, as if you'd never had a break
How to transfer NCB when you switch insurers
This is simpler than switching vehicles: at renewal, tell your new insurer your current NCB percentage and provide your renewal notice or previous policy copy as proof. Since IRDAI treats NCB as portable across insurers, a new insurer cannot refuse to honour a legitimate, provable NCB percentage.
What breaks your NCB
- Filing any own-damage claim during the policy year resets your NCB slab back down, typically to a lower step or to zero, depending on the insurer's exact slab rules
- Letting your NCB retention certificate expire before insuring a new vehicle — after the validity window, you lose the accumulated discount
- Adding a second car under one insurer doesn't combine NCB — each vehicle you own separately builds its own NCB track record unless you're specifically transferring one car's history to a replacement
Don't file a small claim just because you can — a claim for a minor repair worth ₹5,000-₹10,000 can cost you far more than that in lost NCB discount over the following years. Always request the NCB certificate in writing before your policy lapses; verbal assurance from an agent isn't enough if there's a dispute later.
NCB protection add-on
Many insurers offer an NCB protection add-on for a modest extra premium, which lets you make one claim in a policy year without losing your accumulated NCB slab. This is worth considering if you drive in heavy traffic conditions where minor scrapes are common, since it removes the pressure to pay out-of-pocket for small dents just to protect your discount.
A worked example
Say you've built up 35% NCB after three claim-free years on your current car. You sell it and buy a new one three weeks later. You request the NCB certificate from your insurer showing 35%, present it when insuring the new car, and your own-damage premium on the new car is discounted by 35% from day one — as though you'd been driving that exact car claim-free for three years.
Frequently asked questions
Does the buyer of my used car get my No Claim Bonus?
How long is an NCB certificate valid after I sell my car?
Can I transfer NCB between two cars I currently own?
What is the maximum NCB discount I can get in India?
Should I file a small insurance claim or pay out of pocket to protect my NCB?
Sources & further reading
Figures, prices and policy details were current at the last-updated date above. Automotive pricing, incentives and regulations change frequently — verify time-sensitive details with the linked primary sources. Read our editorial policy and fact-checking standards.
