No Claim Bonus (NCB) is a substantial discount on the own-damage premium component of your car insurance, earned for every claim-free year. It starts at 20% and goes up to 50% over five consecutive claim-free years. However, under motor insurance guidelines in India, if you do not renew your policy within 90 days of expiry, your accumulated NCB is wiped out.
The Delayed Renewal
A car owner who had a premium SUV had accumulated a 50% NCB discount after five years of safe driving. The policy expired in January. Since the owner was traveling abroad, they left the car in the garage and delayed the renewal. They returned in May—95 days after the policy had expired—and attempted to renew the comprehensive policy online.
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The Wiped Out NCB Discount
During the online renewal process, the system calculated the premium without the 50% NCB discount. Because the 90-day post-expiry limit was breached, the NCB had legally reset to 0%. The own-damage premium jumped from ₹15,000 to ₹30,000, forcing the owner to pay ₹15,000 extra. Furthermore, the car had to undergo a physical inspection by a surveyor before the cover was approved.
- Renew your car insurance on time, even if the vehicle is not being driven or is parked in a garage.
- If you sell your car, obtain an 'NCB Reserving Letter' from the insurer to transfer your discount to your new vehicle.
- Remember that a policy lapse of over 90 days requires a fresh vehicle inspection before approval.
- Utilize auto-renewal features on insurance portals to prevent accidental expiration.
