What is No Claim Bonus (NCB), and what can I do if it was wrongly reduced?

No Claim Bonus is a reward for claim-free years. In one insurer's motor wording it is a percentage discount on the own-damage premium that grows with each claim-free year up to a cap, and is lost by claiming or by renewing more than 90 days late; in health insurance it can be an increase in sum insured or a renewal discount. Challenge a wrong reduction in writing, with your previous policies as proof.

No Claim Bonus in motor insurance

In one insurer's standard private car wording, you are entitled to NCB on the own-damage section if no claim was made or pending in the preceding year or years: 20% after one claim-free year, then 25%, 35% and 45%, up to a maximum of 50% after five consecutive claim-free years.^[1]

• Earned at renewal: NCB is earned only when the policy is renewed after its full duration.^[1]
• Lost on a long lapse: In that wording it is allowed only if the policy is renewed within 90 days of the previous policy's expiry.^[1]
• Own damage only: The discount is on the own-damage premium, not on third-party cover.^[1]
• NCB protection: One insurer sells an add-on that keeps your next NCB slab despite a claim, for up to two own-damage claims.^[2]

No Claim Bonus in health insurance

IRDAI's health master circular lets insurers reward claim-free years with a No Claim Bonus, paid at your choice as a cumulative bonus — an increase in sum insured without extra premium — and/or as a discount on the renewal premium. Renewing within the grace period protects the bonus you have built up, and porting carries it to the new insurer.^[3]

If your NCB was wrongly reduced

1. 1

   Find the cause

   Check whether the insurer recorded a claim you did not make, treated a closed claim as pending, or counted a short gap between policies as a lapse.

2. 2

   Gather proof

   Collect your previous schedules showing the NCB and the renewal dates and, if you changed insurers, the previous insurer's record of your NCB.

3. 3

   Raise it quickly

   One insurer asks you to report any error in NCB or vehicle details within 15 days of receiving the policy, for correction.^[2]

4. 4

   Complain in writing

   If the insurer will not correct it, write to its grievance officer. It should resolve your complaint within 14 days, with reasons if it does not accept it. A dispute over premium paid or payable is one of the grounds the Insurance Ombudsman can consider, once the insurer has rejected your written complaint, not replied within one month of receiving it, or replied unsatisfactorily.^{[4, 5]}

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

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