Motor Insurance NCB Transfer to a New Car - citizen guide 2026

Your No Claim Bonus belongs to you, the insured person, not to the car you sold, so you can carry up to a 50% discount on the own-damage premium straight to your new car. The key is one document: an NCB retention certificate from your old insurer.

No Claim Bonus is a discount on your car insurance for every year you do not make a claim. It starts at 20% after one claim-free year and rises in steps to 50%. It rewards the driver, so it moves with you, not with the vehicle, when you upgrade or sell your car.

Third-party motor cover is compulsory for every vehicle on a public road under Motor Vehicles Act 1988, s.146. You cannot drive without it, and no discount applies to it. NCB is a feature of the voluntary own-damage (comprehensive) part of your policy.

The standard motor NCB grid used across insurers is: 20% after 1 claim-free year, 25% after 2, 35% after 3, 45% after 4, and 50% after 5 or more claim-free years. This is the industry-standard tariff grid for own-damage premium, published through IRDAI consumer education material on policyholder.gov.in.

Because NCB attaches to the policyholder, IRDAI consumer guidance allows you to retain and transfer the accumulated bonus when you change your car or your insurer. The outgoing insurer issues an NCB retention or reservation certificate, commonly valid for 3 years, which the new insurer honours.

RTI angle: If a public-sector general insurer - New India Assurance, National Insurance, Oriental Insurance or United India - denies or miscalculates your NCB, you can file an RTI to extract how the decision was reached, because these four are public authorities under the RTI Act 2005. You can also seek IRDAI's general guidance the same way. Note that private insurers are not public authorities, so RTI does not lie against them - use the Insurance Ombudsman route instead.

1. Confirm your claim-free record with your current insurer and note your NCB percentage.
2. When you sell or replace the car, ask the outgoing insurer for an NCB retention certificate in writing.
3. Buy the new car's policy and tell the new insurer you hold a retained NCB.
4. Submit the retention certificate; the insurer applies the discount to the new car's own-damage premium.
5. Check the new policy schedule shows the correct NCB percentage before you pay.
6. Keep the certificate safe: it is commonly valid for up to 3 years if there is a gap between cars.

• Previous policy schedule showing the NCB percentage
• NCB retention or reservation certificate from the outgoing insurer
• Proof of no claim during the policy year, if asked
• Registration papers and invoice of the new car
• Sale or transfer proof of the old car, if it was sold

• Letting the old comprehensive policy lapse for more than 90 days - the accumulated NCB is then forfeited and you start again at zero.
• Expecting NCB to cut the third-party premium - it never does, because third-party cover is the compulsory minimum under Motor Vehicles Act 1988, s.146.
• Assuming the discount stays with the car - it follows you, the insured person, so the buyer of your old car gets no benefit.
• Forgetting to ask for the retention certificate before the old policy closes, leaving no proof to carry the bonus.
• Making a small own-damage claim that wipes out a 50% NCB worth far more than the claim.

If a public-sector insurer rejects your NCB transfer or recalculates it wrongly, an RTI can force them to show the file. Address it to the Public Information Officer of the insurer.

For help drafting, use the AI RTI Drafter. If you get no reply in 30 days, file a first appeal.

It belongs to you, the insured person. That is why you can carry it to a new car even after you sell the old one. The buyer of your old car gets no NCB benefit.

No. NCB applies only to the own-damage part of a comprehensive policy. Third-party cover is the compulsory minimum under Motor Vehicles Act 1988, s.146, and carries no discount.

It is a document from your outgoing insurer confirming your accumulated NCB percentage. You give it to the new insurer to transfer the discount. It is commonly valid for up to 3 years.

The standard grid is 20% after one claim-free year, 25% after two, 35% after three, 45% after four, and 50% after five or more. The cap is 50%.

If a comprehensive policy lapses for more than 90 days, the accumulated NCB is forfeited and you start again from zero on your next policy.

Only if it is a public-sector insurer - New India Assurance, National, Oriental or United India - as these are public authorities. Private insurers are not, so use the Insurance Ombudsman instead.

• Motor Vehicles Act 1988, s.146 - https://www.indiacode.nic.in
• IRDAI consumer education and policyholder portal - https://policyholder.gov.in
• Insurance Regulatory and Development Authority of India - https://irdai.gov.in

• AI RTI Drafter
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• The RTI Act 2005
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