1. What is No Claim Bonus?

No Claim Bonus (NCB) is a discount on your car insurance premium that you earn for each claim-free year. It's a reward for safe driving and not making any claims on your insurance policy.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Premium \) — Your annual insurance premium amount
• \( Discount\ Rate \) — The percentage discount you qualify for (expressed as decimal)

Explanation: The higher your premium and the better your discount rate (based on claim-free years), the greater your No Claim Bonus will be.

3. Importance of NCB Calculation

Details: Calculating your NCB helps you understand potential savings on your insurance premium and the value of maintaining a claim-free record.

4. Using the Calculator

Tips: Enter your current insurance premium amount and the discount rate you qualify for (typically between 20-50% after several claim-free years).

5. Frequently Asked Questions (FAQ)

Q1: How is the discount rate determined?
A: The rate increases with each consecutive claim-free year, typically starting at 20% after 1 year and reaching up to 50% after 5 years.

Q2: What happens if I make a claim?
A: Making a claim usually resets your NCB discount to 0%, though some insurers offer protection options.

Q3: Can I transfer my NCB to another insurer?
A: Yes, NCB is generally transferable between insurance companies when you switch providers.

Q4: Does NCB apply to all types of insurance?
A: No, it typically only applies to comprehensive car insurance policies, not third-party only policies.

Q5: Is there a maximum NCB discount?
A: Most insurers cap the maximum discount at 50-60% after 5-7 claim-free years.