Benefits of No Claim Bonus (NCB): Save More While Staying Protected

When it comes to choosing the best motor insurance, people usually focus on coverage, add-ons, and the premium. But there is one important benefit that often goes unnoticed until it's time to renew your policy—No Claim Bonus, or NCB. It is one of the most rewarding features of your motor insurance, and if used wisely, it can help you save a significant amount over the years.

Let’s break down what NCB really is, how it works, and why it is something every responsible vehicle owner should be aware of.

What Is No Claim Bonus (NCB)?

No Claim Bonus is a reward offered by your insurance provider for not making any claims during your policy period. It is a way of acknowledging safe and responsible driving. The bonus comes in the form of a discount on your own damage premium when you renew your policy.

The best part? The discount increases with every consecutive claim-free year. If you go five years without filing a claim, your NCB can go up to 50 percent, which means major savings when you renew your insurance.


How Does NCB Work?

Let’s say you buy a comprehensive motor insurance policy for your car. If you go the entire policy term without filing a single claim, you become eligible for a No Claim Bonus during renewal. This discount applies only to the own damage portion of your premium—not on third-party liability cover which is fixed by law.

Here is a simple breakdown of NCB percentages based on claim-free years:

  • 1st year claim-free: 20 percent discount

  • 2nd year claim-free: 25 percent discount

  • 3rd year claim-free: 35 percent discount

  • 4th year claim-free: 45 percent discount

  • 5th year claim-free: 50 percent discount

Even though the percentage may seem small at first, the savings compound over time and become substantial, especially when paired with a well-priced policy from a trusted provider like Universal Sompo.


Key Benefits of No Claim Bonus

1. Significant Cost Savings

The biggest advantage of NCB is the direct discount on your renewal premium. With premiums increasing every year due to inflation, this bonus helps offset the cost and keeps your motor insurance affordable.

2. Reward for Responsible Driving

NCB is your insurer’s way of saying “well done” for driving safely and taking good care of your vehicle. It encourages good habits on the road, which not only protects you but also others.

3. Transferable Between Insurers

Planning to switch insurers? No problem. Your NCB stays with you. When you move to a new insurer, you can carry forward your accumulated bonus—just make sure you get an NCB certificate from your previous insurer.

4. Applicable to New Vehicles

If you sell your old car and buy a new one, you do not lose your NCB. The bonus is tied to you, not the vehicle. You can transfer it to your new car and continue to enjoy the benefits.

5. Builds Over Time

As you continue to go claim-free year after year, your NCB keeps increasing. A 50 percent discount on the own damage premium is a significant reward for consistent careful driving.


Situations That Can Impact Your NCB

While the No Claim Bonus is a valuable benefit, it can be lost under certain conditions:

  • Filing even a single claim during the policy year resets the NCB to zero

  • Not renewing your policy within 90 days of expiry can result in NCB lapse

  • Changing policyholder details without updating the insurer may result in errors in NCB transfer

  • Misuse or false claims may lead to NCB forfeiture

This is why many experienced vehicle owners often think twice before raising a claim for minor damage. If the repair cost is lower than the NCB discount they stand to lose, they often prefer to pay out of pocket.


How to Maximise Your NCB

Here are a few tips to get the most out of your No Claim Bonus:

  • Drive carefully and avoid minor accidents

  • Do not raise small claims unless absolutely necessary

  • Renew your policy before the expiry date

  • Choose voluntary deductibles to lower your premium and rely on NCB for savings

  • Track your NCB during policy renewals and ensure it is correctly reflected

These small steps help you make the most of the bonus without compromising on protection.


Why Universal Sompo Is the Smart Choice

At Universal Sompo, we believe in rewarding safe drivers and responsible policyholders. Our motor insurance policies are designed to help you earn and retain your NCB with ease.

When you buy or renew your policy with us, you get:

  • Easy-to-track NCB status at every renewal

  • Hassle-free transfer of NCB when switching vehicles or insurers

  • Affordable premiums with additional add-on choices

  • Transparent communication so you know exactly what you are saving

When paired with the best motor insurance, your NCB becomes more than just a discount—it becomes a long-term benefit that grows with your journey.


Final Thoughts

No Claim Bonus is not just a financial perk. It is a reflection of your careful habits and commitment to safe driving. With up to 50 percent savings possible, it is a benefit worth protecting. Whether you are buying a new car, renewing your policy, or switching providers, make sure you understand and preserve your NCB.

Stay safe, drive responsibly, and choose Universal Sompo to ensure your hard-earned bonus works for you year after year.

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