No Claim Bonus (NCB) is the reward granted to the insured in an insurance policy following a claim-free year. It is a benefit gifted to policyholders that renew their insurance policy or buy a new insurance policy after the existing policy has expired.
In general, an NCB will typically offer policyholders a discount against their next year's insurance premium. The size of the discount increases with every consecutive year the policyholder goes without claiming and ranges from 10% to 50%. Here are more details about NCB in an expired policy:
• NCB earned in an expired policy can be transferred to the new policy. The amount of NCB varies depending on the insurer.
• The NCB earned in a policy is valid only if the policy is renewed with the same insurer.
• However, if a policy is not renewed, the NCB earned under the expired policy cannot be transferred to the new policy.
• The IRDAI has set the NCB rules and the award shall not exceed 50%.
Hope this helps. If you need more clarity on this topic, you can refer to the IRDAI page (https://www.irdai.gov.in/GREENCHANNEL/Files/Motor_NCB_Circular_Nov_2017.pdf) for more information.
