Car Insurance No Claim Bonus 2026: Should You Claim?

Quick answer: No Claim Bonus is a discount on the own-damage part of your motor premium, earned for every consecutive claim-free year — 20% after one year, rising to 50% after five. One own-damage claim, however small, wipes it back to nil at the next renewal. So before you report a scratched bumper, work out whether the repair costs less than the discount you are about to surrender.

What NCB actually discounts — and what it never touches

A comprehensive motor policy has two halves. The third-party portion is compulsory and its rate is notified centrally, so no insurer can discount it. The own-damage portion pays for your vehicle, and its price is set by the insurer. No Claim Bonus applies to that second half only.

This matters more than it sounds. If your renewal notice shows a total of Rs 14,000 and you are expecting 50% off, you are not paying Rs 7,000. The third-party premium, the compulsory personal accident cover for the owner-driver, and any add-ons you bought sit outside the discount entirely. Half comes off the own-damage line and nothing else. People who budget for the wrong number are the ones who ring their insurer at renewal convinced the bonus was not applied.

The rule comes from General Regulation 27 of the India Motor Tariff, which states plainly that NCB "can be earned only in the Own Damage section" of the policy. Own-damage pricing was de-tariffed in 2007 and insurers now set their own base rates, but the tariff's General Regulations still govern the structure of the product — which is why the same bonus grid turns up across every insurer's filed wording. If you hold a third-party-only policy, there is no own-damage section and therefore no NCB to earn. Our explainer on comprehensive versus third-party cover sorts out which one you actually hold.

The grid, exactly as the tariff sets it

• No claim made or pending in the preceding full year — 20%
• 2 consecutive claim-free years — 25%
• 3 consecutive claim-free years — 35%
• 4 consecutive claim-free years — 45%
• 5 consecutive claim-free years — 50%

Fifty per cent is the ceiling. There is no sixth rung, so a driver who has been claim-free for eleven years sits exactly where the five-year driver sits.

Read the words "or pending" carefully. A claim you registered and then abandoned, or one still open at renewal, counts against you just as a settled claim does. If you opened a claim and later decided to pay the garage yourself, ask your insurer in writing to close it as "no claim" before the policy expires. Do not assume that walking away from it is enough.

One more condition: entitlement arises only at renewal, after a full twelve months of cover. A policy cancelled mid-term earns nothing.

The real decision: claim it, or pay for it yourself?

Here is the arithmetic almost nobody does before calling the claims line.

Suppose your own-damage premium before discount is Rs 12,000 and you are sitting at the full 50%, so you pay Rs 6,000. You reverse into a pillar and the bodyshop quotes Rs 18,000. Claim it, and your bonus resets to nil — then climbs back through the grid over the following five renewals.

What the reset actually costs

• Next renewal, 0% NCB — you pay Rs 12,000 instead of Rs 6,000. Extra: Rs 6,000
• Year 2, back to 20% — Rs 9,600 against Rs 6,000. Extra: Rs 3,600
• Year 3, 25% — Rs 9,000 against Rs 6,000. Extra: Rs 3,000
• Year 4, 35% — Rs 7,800 against Rs 6,000. Extra: Rs 1,800
• Year 5, 45% — Rs 6,600 against Rs 6,000. Extra: Rs 600
• Year 6 — back to 50%, no difference

Total cost of that reset: roughly Rs 15,000, spread over five years. Against an Rs 18,000 repair, claiming still wins — but by far less than it first appeared, and only if you keep the car and stay claim-free throughout.

Two honest caveats on that figure. It assumes the own-damage base premium holds steady, which it will not: own-damage premium is charged as a percentage of your Insured Declared Value, and IDV falls every year as the vehicle ages, so the real drag is somewhat smaller. And it assumes five uninterrupted claim-free years, which is exactly what you cannot promise. Treat the number as the right order of magnitude, not a quotation.

Then subtract the compulsory deductible, which comes off every own-damage settlement regardless. The tariff set it at Rs 500 for private cars up to 1500cc and Rs 1,000 above that, and Rs 50 for two-wheelers; current filed wordings commonly show higher figures, so read the number printed on your own schedule rather than trusting any published figure, including this one.

A workable rule of thumb

If the repair bill, after your deductible, is smaller than the bonus you would forfeit, pay the garage and keep the discount. Small cosmetic damage — a bumper scuff, one panel, a wing mirror — is usually cheaper to absorb, especially when you are at 45% or 50% and have the most to lose. Anything structural, anything involving a third party, and anything you cannot comfortably fund should go to the insurer. That is what the cover is for, and nursing a bonus while driving a badly repaired car is a poor trade.

Your NCB belongs to you, not to the car

This is the most useful and least understood clause in the whole regulation. The tariff provides that NCB "shall follow the fortune of the original insured and not the vehicle or the policy."

Practical consequences:

• Sell the car, keep the bonus. It moves to your next vehicle, provided that vehicle is of the same class — a private car bonus carries to another private car, not to a commercial vehicle.
• The buyer gets nothing. When ownership transfers, the new owner's entitlement is based on their own record, not yours.
• Switching insurers does not cost you anything. The new insurer may allow the same rate on evidence of entitlement — a renewal notice or a confirmation letter from the previous insurer. If you cannot produce it, a signed declaration is accepted, after which the new insurer is required to write to the old one for confirmation.
• It survives death. Where an individual dies and custody of the vehicle passes to a spouse, children or parents, the bonus passes to them.
• Company car transferred to you? If the vehicle was allotted to and exclusively operated by you, the bonus earned in that period can pass to you, on a letter from the employer confirming it.

Four ways people lose a bonus they had every right to keep

Letting the policy lapse past 90 days. Renew later than 90 days after expiry and the bonus is gone. Not reduced — gone. This is the single most common own goal, and it costs more than most people realise.

Selling the car and forgetting the clock. If you sell or lay up the vehicle and do not insure immediately, you can still claim the bonus on a fresh policy taken within three years of the previous policy's expiry, at the rate you had earned. Ask your insurer for the reserving letter when the policy ends, not two years later.

Leaving a claim open. Covered above, and worth repeating, because "pending" is doing real work in that sentence.

Breaking continuity. The bonus is allowed only where the vehicle has been insured continuously for twelve months without a break. Short gaps between policies are not cost-free.

Is the "NCB Protect" add-on worth buying?

Most insurers sell an add-on that lets you make one or two own-damage claims in a year without resetting the bonus. It is a genuinely useful product for a high-mileage city driver sitting at 45% or 50%.

One caution: this add-on is not part of the tariff. It is an insurer-designed cover filed individually with IRDAI, so the number of claims permitted, the types excluded, the effect on your position in the grid and the price all differ between companies. Some versions protect the bonus but still step you down a slab. Read the specific wording rather than the brochure line, and price it against the bonus you are protecting — on a modest own-damage premium the add-on can cost more than the discount is worth. For other levers on the same bill, see our guide to reducing car and bike insurance premiums.

Before you renew — a short checklist

• Find the NCB percentage on your renewal notice and check it against the grid and your claim history.
• Confirm the discount has been applied to the own-damage line, not the total.
• Diarise the expiry date; treat the 90-day limit as an emergency backstop, not a plan.
• Selling the vehicle? Ask for the NCB reserving letter before the policy lapses.
• Switching insurers? Keep last year's renewal notice — it is the evidence the new insurer needs.
• Do the break-even sum before reporting any small own-damage claim.
• Check the compulsory deductible printed on your schedule.

Frequently asked questions

Does a third-party claim affect my No Claim Bonus?

NCB is earned in the own-damage section, so a claim paid purely under third-party liability should not disturb it. In practice most accidents generate damage to your own vehicle as well, and that own-damage element is what resets the bonus. Policy wordings vary — confirm with your insurer before assuming.

If I use a zero-depreciation add-on, does my bonus survive?

No. Zero-depreciation changes how much the insurer pays on a repair; it does not change whether a claim was made. The own-damage claim still resets your bonus.

Can I carry my NCB to a bike from a car?

No. The bonus transfers to a substituted vehicle of the same class. A private car and a two-wheeler are different classes and each builds its own record.

What happens to the bonus if my car is written off?

A total-loss settlement is a claim, so the bonus resets when you insure the replacement vehicle. Worth factoring in when you compare a write-off settlement against the cost of getting back on the road.

I have been claim-free for nine years — why does it still say 50%?

Because 50% is the top of the grid. Additional claim-free years maintain your position but do not increase the discount.

Does NCB reduce my third-party premium at all?

No. Third-party rates are notified centrally and are identical across insurers, so no bonus or discount applies to that portion.

Sources

The bonus grid, the own-damage-only restriction, the "follows the fortune of the original insured" rule, the 90-day renewal limit, the three-year retention window, the inter-insurer transfer procedure and the compulsory deductible table in this article are taken from General Regulation 27 and General Regulation 40 of the India Motor Tariff (2002), the General Regulations of which continue to govern motor policy structure after own-damage de-tariffing in 2007, as reproduced in motor policy wordings filed with the Insurance Regulatory and Development Authority of India (irdai.gov.in). Add-on covers such as NCB protection sit outside the tariff and are filed individually by each insurer, so their terms are not standardised. Illustrative premium figures are worked examples, not quotations. NewEdgePolicy is an independent insurance education publisher — not an insurer, broker or advisor — and this is general information rather than advice on any specific policy. Read your own policy wording, and see our editorial policy or browse more car and bike insurance guides.