# No Claim Bonus (NCB): How It Works & How to Protect It

> How No Claim Bonus works in Indian car insurance, how much you can earn, how it transfers, and how to avoid losing it.
- **Published**: 2026-08-16
- **Modified**: 2026-08-16
- **Category**: auto-insurance
- **URL**: https://www.tldr.money/articles/auto-insurance/no-claim-bonus-explained

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Use this with the full [car insurance guide](/auto-insurance). NCB is central to renewal, so read it with the [renewal guide](/articles/auto-insurance/car-insurance-renewal-guide).

## What No Claim Bonus is

No Claim Bonus (NCB) is a discount you earn on your own-damage premium for every year you do not make a claim. It starts modest after the first claim-free year and rises step by step to a substantial percentage after several claim-free years. It rewards careful driving and can meaningfully cut your renewal cost.

## The key rules

- **It builds only in claim-free years.** Make a claim and, without protection, the bonus resets to zero at the next renewal.
- **It belongs to you, not the car.** When you sell your car and buy a new one, the NCB transfers to the new car's own-damage policy.
- **It transfers between insurers.** Switching insurers at renewal does not cost you the bonus, as long as you renew on time.
- **It can lapse.** If the policy lapses beyond the allowed grace window, the NCB is usually lost.

## How to protect your NCB

1. **Renew on time.** The most common way people lose NCB is by letting the policy lapse. Set a reminder or auto-renew.
2. **Claim selectively.** For small damage, weigh the repair cost against the bonus you would forfeit by claiming. Sometimes paying a minor bill yourself keeps a valuable discount.
3. **Add NCB protection.** This [add-on](/articles/auto-insurance/car-insurance-add-ons-explained) lets you keep the accumulated bonus even after a claim. It is worth it once your bonus is high.
4. **Carry it forward when switching cars or insurers.** Request an NCB retention or transfer certificate so the bonus moves with you.

## A simple decision for small claims

If a repair costs only a little more than what claiming would cost you in lost NCB and higher future premiums, pay it yourself and protect the bonus. For large repairs, claim, especially if you hold NCB protection.

Compare insurers and their NCB terms on the [all car insurance companies](/auto-insurance/insurers) page, and shortlist from the [best car insurance companies](/articles/auto-insurance/best-car-insurance-companies-india).
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