Definition
Motor No-Claim Bonus
Motor No-Claim Bonus is a discount on the own-damage premium granted for each consecutive claim-free policy year, accumulating up to a maximum slab.
Motor NCB rewards careful driving by cutting the OD premium, starting at a base discount after the first claim-free year and rising in slabs to a maximum after several consecutive claim-free years. It is the vehicle owner's reward, not the vehicle's, so it can be transferred to a new car.
A single claim usually resets the NCB to zero at the next renewal, which is why owners sometimes pay small repairs out of pocket to protect a high NCB. An NCB protection add-on lets the owner make a limited number of claims without losing the accumulated bonus.
Related terms
- Own-Damage CoverOwn-damage (OD) cover compensates for damage to or loss of the insured's own vehicle from accidents, theft, fire and natural calamities.
- Comprehensive Motor InsuranceComprehensive motor insurance combines mandatory third-party liability cover with own-damage protection for the insured's vehicle in a single policy.
- NCB ProtectionNCB protection is a motor add-on that preserves the accumulated no-claim bonus even after the policyholder makes a permitted number of claims.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.