What You Need to Know About NCB Calculation in Motor Insurance?

Have you ever renewed your motor insurance policy online and noticed your premium getting lower each year, even though your car’s age goes up? That’s not a fluke, it’s the power of the No Claim Bonus (NCB). If you’ve ever wondered what a no claims bonus is, how it works, or how to maximize its value, you’re in the right place.

As one of India’s top insurance providers, Liberty General Insurance makes understanding and earning your NCB smoother and more rewarding than ever. Let’s decode No Claim Bonus so you can make confident choices and save more every renewal!

What is No Claim Bonus in a Motor Insurance Policy?

• No Claim Bonus (NCB) is a reward for safe driving and not making any claims during your motor insurance policy term.
• If you go claim-free for a year, you earn an NCB discount on your motor insurance premium when you renew.
• Motor insurance online platforms make it simple to see your NCB and help policyholders benefit from it.
• NCB is available for cars and bikes under your own-damage or comprehensive motor insurance policy, not third-party only.
• With Liberty General Insurance, your NCB journey is visible, transparent, and easy to track online.

How is No Claim Bonus Calculated in Motor Insurance Policies?

• Each claim-free year increases your NCB, starting at 20% and reaching up to 50%.
• The NCB is attached to the motor insurance policyholder, not the vehicle. This means you can transfer it if you buy a new car or switch insurers.
• Online platforms, especially Liberty General Insurance, keep your NCB history clear and help you make use of it during renewal.
• If you claim during the policy term, your NCB gets reset to zero for the next renewal cycle.

NCB Year-on-Year Table

The table below shows the different slabs of NCB calculation for car insurance -

Claim-Free Years	NCB % on Own-Damage Premium
First year	20%
Second year	25%
Third year	35%
Fourth year	45%
Fifth year+	50%

Quick Example:

If your car insurance own-damage premium is ₹4,000, after three claim-free years, your NCB is 35%. You pay ₹2,600 instead of the full price, a direct savings from your motor insurance policy.

How to Calculate NCB in Motor Insurance Policy?

The calculation is simple. Here’s the formula:

NCB = Own Damage Premium × NCB Percentage

Example:

If your own damage premium for your motor insurance policy is ₹5,000 and your NCB for the fourth year is 45%, your NCB amount is:

₹5,000 × 45% = ₹2,250
Your renewal premium will reduce by ₹2,250!

Online motor insurance platforms, like those offered by Liberty General Insurance, show your eligible NCB automatically at renewal.

How to Maximize Your No Claim Bonus?

• Always renew your motor insurance policy on time—delays beyond 90 days after expiry can cancel your NCB.
• If you switch your car or insurer, you can transfer your No Claim Bonus. Just submit the request when buying your policy online.
• Avoid making small claims for minor damages. Sometimes paying a small repair out-of-pocket preserves your larger NCB discount.
• Check for add-ons like “NCB Protect” available online. If you must make a claim, these can help you retain your bonus.

Why Choose Liberty General Insurance for Motor Insurance Online?

• Liberty General Insurance is known for swift, digital-first processes in India.
• Offers hassle-free policy renewal and NCB tracking, 100% online.
• Wide network of service garages and customer support across India.
• Transparent display of NCB earned, with instant updates and support for NCB transfers.
• NCB Protect and other smart add-ons available to maximize your savings.
• Policy documents and claims, all accessible with a few clicks, anytime.

By driving safe, renewing on time, and using Liberty General Insurance’s seamless online services, you make insurance easier and more affordable with every passing year. Ready to maximize your NCB? Liberty General Insurance is here to help, conveniently, securely, and digitally.

Frequently Asked Questions (FAQs)

1. What is no claims bonus in a motor insurance policy?

A no claims bonus (NCB) in a motor insurance policy is a special discount you earn on your renewal premium when you don’t file any claim during the policy year. This reward encourages safe driving and can lower the cost of your motor insurance policy each year, making your vehicle protection more affordable and rewarding for responsible behavior.

2. How is NCB calculated in a motor insurance policy?

NCB is calculated based on the number of consecutive claim-free years you have with your motor insurance policy. The percentage discount starts at 20% for the first year and increases up to 50% after five claim-free years. The formula is: NCB = Own Damage Premium × NCB Percentage. This reduces your premium every time you renew motor insurance online.

3. Is NCB transferable?

Yes, NCB is fully transferable between vehicles and even insurers as long as you haven’t made a claim. If you buy a new car or switch to a different insurance company, you can carry forward your accumulated no claim bonus to your new motor insurance policy, provided you follow the proper transfer process during renewal or policy purchase.

4. What happens to no claim bonus if I file a claim?

If you file a claim during the policy year, your no claim bonus in the motor insurance policy resets to zero for the next renewal cycle. Even a small claim can wipe out the accumulated discount, so it’s wise to use your NCB benefit wisely. Some insurers offer an NCB Protect add-on to help you retain your discount even after a claim.

5. How can I check my NCB status online?

You can easily check your NCB status online through your insurer’s website or mobile app. Leading providers like Liberty General Insurance display your accumulated no claim bonus when you log in to renew your motor insurance policy online. This transparency allows you to see your NCB and ensures you get the right discount at every renewal.