You are reversing your car and accidentally hit a pillar. The rear bumper is dented.
The garage says repairs will cost ₹4,000.
Your first instinct is: "I have comprehensive insurance! Let me file a claim."
Don't do it yet.
If you file that claim, you might lose your No Claim Bonus (NCB), which could be worth far more than ₹4,000.
Here is the math every Indian car owner must know.
Disclaimer: NCB rules are standard across all Indian insurers (IRDAI regulated). Percentages apply to the "Own Damage" premium component only.
Scratched Your Bumper? Stop!
1. What Is No Claim Bonus (NCB)?
NCB is a reward given by the insurance company for being a safe driver.
If you don't make a claim for a full policy year, you get a discount on the premium next year.
📉 The NCB Discount Ladder
- 1 Claim-Free Year: 20% Discount
- 2 Consecutive Years: 25% Discount
- 3 Consecutive Years: 35% Discount
- 4 Consecutive Years: 45% Discount
- 5+ Consecutive Years: 50% Discount (Maximum)
2. The Math: Cash vs. Claim (Updated)
Let's say you drive a Honda City with a 50% NCB (Saving you ₹10,000/year).
Scenario: You have a dent costing ₹4,000 to repair.
🧮 Do The Calculation
- Option A (Claim Insurance):
- Repair Cost: ₹4,000
- Less "Compulsory Deductible": -₹1,000 (You must pay this by law)
- Insurer Pays: ₹3,000
- Cost to You: You lose your 50% NCB next year (Loss of ₹10,000).
🔴 Net Result: You gain ₹3,000 now but lose ₹10,000 later. Bad Deal. - Option B (Pay Cash):
- You pay ₹4,000.
- You keep your ₹10,000 discount.
🟢 Net Result: You save ₹6,000.
3. The "90-Day" Trap (Use It or Lose It)
This is where many people lose money.
Your NCB is valid only if you renew your policy within 90 days of its expiry date.
If your policy expires on January 1st and you forget to renew until April 5th (over 90 days), your 50% NCB resets to 0% automatically.
Lesson: Never let your policy lapse for more than 3 months.
4. The Solution: "NCB Protection" Add-on
What if you want to claim and keep your discount?
You can buy an add-on called NCB Protect.
- Cost: Approx. ₹500 - ₹1,000 extra.
- Benefit: It allows you to make 1 claim in a year without dropping your NCB to zero.
- Warning: If you claim using this add-on, you usually must stick with the same insurer next year. Other companies may not honor the "protected" NCB if they see a claim history.
5. NCB Belongs to YOU, Not the Car
Here is a secret most people miss.
If you sell your old Swift (with 50% NCB) and buy a new Creta, you can transfer the 50% discount to the new car.
- How: Get an "NCB Retention Letter" from your insurer when you sell the old car.
- Benefit: You get a massive discount on the expensive new car's premium immediately.
- Validity: The certificate is valid for 3 years.
Be Smart with Your Bonus
Your No Claim Bonus is like a gold coin. Don't spend it on a cheap chocolate (small repair). Save it for a rainy day or use it to reduce the cost of your next big car purchase.
Action Plan:
- Check your current policy: What is your NCB %?
- Remember the "Compulsory Deductible" (₹1,000/₹2,000) before filing any small claim.
- If selling your car, always ask the insurer for the NCB Retention Letter before handing over the keys.
Helpful Resources:
HDFC Ergo: Everything About NCB
ICICI Lombard: Transferring NCB Guide
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