NCB (No Claim Bonus) is a discount on the own-damage portion of your car insurance premium, earned for every year you don't make a claim. In India it starts at 20% after one claim-free year and climbs on a fixed slab — 20%, 25%, 35%, 45% — to a maximum of 50% after five consecutive claim-free years.
How it works
The discount applies only to the own-damage premium, not the third-party portion, which is rate-regulated. Make a single claim and your accumulated NCB resets to zero at the next renewal — unless you've bought an NCB-protection add-on, which preserves the slab through one or two small claims. The bonus also lapses if you let the policy stay expired beyond 90 days, so renew on time.
Why it matters when buying
NCB belongs to you, not the car. When you sell your old car and buy a new one, ask the insurer for an NCB retention certificate and transfer the discount to the new policy — on a bigger, costlier car, a 50% NCB is worth real money every single year. It also changes claim maths: for a scratch worth ₹6,000, paying out of pocket and protecting a 50% NCB is often cheaper than claiming. Dealers arranging insurance at delivery rarely ask about your existing NCB; check yourself, as covered in dealer vs online car insurance.
A concrete example
If your new car's own-damage premium is ₹16,000 and you carry a 50% NCB from your previous car, you pay ₹8,000 — a ₹8,000 saving in year one alone.