NCB in Four-Wheeler Insurance: How It Works and How to Transfer It

NCB can reduce the cost of your motor policy, but many vehicle owners lose it due to minor mistakes at renewal or during a four-wheeler sale. In car insurance, the No-Claim Bonus (NCB) rewards a claim-free year by lowering the own-damage part of the premium.

This blog explains what NCB means, how it is calculated, and how to transfer it when selling a vehicle or moving to a new insurer.

 

What Is NCB in Four-Wheeler Insurance?

NCB is a discount given at renewal when the policy completes a year without an own-damage claim. It is applied to the own-damage portion of the premium, not to the third-party liability premium that is mandatory and separately priced. Because it needs an own-damage premium to apply to, NCB is relevant in comprehensive insurance and in stand-alone own-damage covers. Because NCB depends on your claim history, it belongs to you, not to the vehicle.

 

How Does NCB Work?

NCB is earned after a full 12-month policy period ends with no claim made or pending. The percentage then applies at renewal, and it increases in slabs for consecutive claim-free years up to a maximum level.

If an own-damage claim is reported during the year, the accumulated NCB generally drops to nil at the next renewal under standard rules. During four-wheeler insurance renewal, the insurer calculates the discount on the own-damage premium payable for the next policy term.

Key Rules and Conditions of NCB

NCB can deliver premium discounts, but it comes with conditions that affect eligibility and transferability.

Key points include:

• NCB applies only to the own-damage section of the policy premium.
• It is granted only at renewal after completing a full year of cover.
• If you make a claim, or if a claim is still being processed from the previous year, your NCB for the next renewal may be reduced or not available.
• NCB is generally allowed only if renewal is done within a stipulated window, often around to 90 days.
• The bonus follows the insured person, not the vehicle, and ownership transfer changes eligibility.
• Insurers may require an NCB confirmation letter or renewal notice to verify the declared slab.

 

How to Transfer NCB When Selling Your Four-Wheeler

On the sale of a vehicle, the buyer usually cannot use the seller’s NCB because the bonus is linked to the seller’s claim history. To retain it, the seller requests an NCB confirmation from the insurer once ownership transfer formalities are initiated and ensures that the policy transfer is handled correctly for the new owner.

The retained NCB can then be applied to the seller’s following eligible policy for a vehicle in the same class, subject to timelines and verification. This matters because the discount is applied only at renewal, so missed steps can mean losing the accumulated slab.

NCB Transfer When Changing Insurance Companies

Changing insurers does not mean losing the NCB, as long as the renewal is done correctly. At renewal, the new insurer checks the previous policy details and the claim record to confirm the correct NCB percentage.

If documents are required, the insurer may ask for an NCB confirmation or the previous policy renewal notice showing the eligible bonus. Providing the right information matters because an incorrect NCB declaration can later result in a premium correction or other issues.

 

NCB Protection Add-On: Is It Worth It?

NCB protection is an optional cover designed to prevent the accumulated NCB from being wiped out after an own-damage claim. The operating rules vary by insurer and product. Some policies preserve the NCB for a limited number of claims, while others reduce it by a smaller step at renewal instead of dropping it to nil. Conditions and exclusions can apply, so it is best assessed alongside other add-on benefits, rather than treated as automatic.

 

Conclusion

NCB is a renewal discount on the own-damage premium that rewards a claim-free year. It builds over time, but it can be lost due to a claim, incorrect disclosure, or delayed renewal. When selling a vehicle, the seller can usually retain the NCB through proper documentation, and it can also be carried forward when switching insurers. By understanding the rules and completing four-wheeler insurance renewal on time, the bonus can remain a steady source of savings.