IRDA NCB Confirmation

Can you tell me about the No Claim Bonus (NCB) benefit offered by IRDA or Insurance Regulatory and Development Authority under its Motor Insurance policy?

No Claim Bonus (NCB) benefit offered by IRDA or Insurance Regulatory and Development Authority under its Motor Insurance policy is the benefit accrued to an insured for not making any claims during the previous policy period.

As per current norms in India, it ranges from 20% on the Own Damage premium (and not on Liability premium) and progressively increases to a maximum of 50%.

If, however, a claim is lodged, the No Claim Bonus is lost in the subsequent policy period.

NCB is given to the insured and not to the insured vehicle. Hence, on transfer of the vehicle, the insurance policy can be transferred to new owner but not the NCB.

The new owner has to pay the difference on account of NCB for the balance policy period. The original owner can, however, use the NCB on a new vehicle purchased by him.

Motor Insurance covers:

The damages to the vehicle due to the following perils are usually covered under OD section of the Motor Insurance policy:
Fire, Explosion, Self- Ignition, Lightning
Burglary/Housebreaking / Theft
Riot & Strike
Earthquake
Flood, Storm, Cyclone, Hurricane, tempest, inundation, hailstorm, frost
Accidental external means
Malicious Act
Terrorism acts
While in Transit by Rail/ Road, Inland waterways, Lift, Elevator or Air
Land slide / Rock slide

Motor Insurance excludes:
The following contingencies are usually excluded under the Motor Insurance Policy:
Not having a valid Driving License
Under Influence of intoxicating liquor/ drugs
Accident taking place beyond Geographical limits
While Vehicle is used for unlawful purposes
Electrical/Mechanical Breakdowns