Insurance companies are issuing motor insurance policies with up to 50% ‘No Claim’ bonus

Staff Correspondent: Most insurance companies are issuing motor insurance policies by offering a maximum of 30 to 50% No Claim Bonus. However, questions have arisen as to how far the law is being followed in granting the No Claim Bonus. On the other hand, insurance companies say that after the mandatory requirement for motor insurance was withdrawn, the tendency to take motor insurance has declined. Now, policies are being issued mainly for those vehicles that are purchased with bank loans. In other words, customers are taking policies to comply with the conditions of the loan documents. As a result, customers are demanding motor insurance certificates at lower cost. This has had an impact on the insurance companies. To survive in the competition, the companies have chosen the No Claim Bonus as an opportunity.

Discussions with people associated with the insurance sector reveal that if one company does not give a No Claim Bonus, another company does. Consequently, out of fear of losing business, most companies are being forced to offer the No Claim Bonus. This is the reality of the non-life insurance sector in the matter of issuing motor insurance policies. However, if motor insurance is made mandatory again as it was earlier, this situation will not continue.

According to them, the No Claim Bonus is legally valid. But questions remain as to whether it is being given in compliance with the prescribed conditions. To retain business and provide motor insurance policies at lower cost according to customers’ demand, risks also have to be reduced. In this case, policies are being issued at lower cost by excluding risks such as flood, cyclone and earthquake.

A review of multiple motor certificates obtained by Insurance News BD shows that every policy has been given a 30 to 50% No Claim Bonus. At the same time, instead of the basic premium rate of Tk 2.65 for motor insurance, a rate of Tk 1.65 has been applied by reducing risks. In reducing the rate, no risks of flood, cyclone or earthquake are being taken. Additionally, by showing AVLS, the premium is being reduced by 10%. AVLS stands for Automatic Vehicle Location System, which means the presence of a GPS system in the vehicle.

According to the policy guidelines of Bangladesh’s Motor Tariff Rate, cases in which No Claim Bonus cannot be given include: if a claim is made before the expiry of the insurance term, No Claim Bonus cannot be given. If any claim remains suspended or unresolved, the customer will not receive No Claim Bonus. In addition, the policy must be renewed on time.

According to the tariff rate, in the case of Act Basic Premium for motor insurance, after the first policy is taken, if there is no claim for one year for private and commercial vehicles, 10% is given at the time of renewal in the following year; if there is no claim for two consecutive years, 20% is given at the time of renewal in the following year; and if there is no claim for three consecutive years, 25% is given at the time of renewal in the following year. However, third-party motor insurance has currently been discontinued.

In the case of Comprehensive Motor Insurance, after the first policy is taken, if there is no claim for one year for private and commercial vehicles, 30% is given at the time of renewal in the following year; if there is no claim for two consecutive years, 40% is given at the time of renewal in the following year; and if there is no claim for three consecutive years, 50% is given at the time of renewal in the following year.

No Claim Bonus is not given when taking a policy for a new or reconditioned vehicle. However, if the customer has a previous vehicle and no claim has been made on that vehicle, the No Claim Bonus can be obtained. In addition, for No Claim Bonus, the policy must be renewed within 30 days after the expiry of the previous term; if 30 days pass, No Claim Bonus will not be available. If ownership of the vehicle changes, the new owner will not receive No Claim Bonus.

Matters that must be verified while granting No Claim Bonus include: the term of the previous policy, whether any claim has been made, whether any claim is pending, whether the policy has been renewed continuously, the type of vehicle (private, commercial or motorcycle), and on which portion of the premium it is applicable.

A review of the motor certificates in the possession of Insurance News BD shows that Green Delta Insurance Company Limited issued a policy for a vehicle manufactured in 2026 on 4 August 2026. Motor Certificate Number – GDI/PBD/8/2026/MTR/T/251008.

In this policy, a 30% No Claim Bonus has been given. A 10% discount has been given for AVLS, thereby reducing the premium. In addition, to reduce the premium in this policy, risks of riot and strike damage, earthquake fire damage and vibration fire damage, and flood and cyclone damage have not been taken.

Reliance Insurance issued a comprehensive motor insurance policy on 4 January. Motor Certificate Number – RIAL/HD/MV(PV)/P-00001/01/2026 (Comp).

This 1800 cc Toyota vehicle was manufactured in 2020. In this policy, a 30% No Claim Bonus has been given. A 10% discount has been given for AVLS.

Risks that have been excluded to reduce the premium include: riot and strike damage, earthquake fire damage and vibration fire damage, and flood and cyclone damage. Due to the exclusion of these risks, the premium rate has been reduced by 1%.

On 24 February, Reliance Insurance issued another motor certificate. According to the information of this comprehensive motor policy, the 1800 cc Toyota Cross Hardy Jeep was manufactured in 2022. In this policy as well, risks of riot and strike damage, earthquake fire damage and vibration fire damage, and flood and cyclone damage have been excluded. Due to the exclusion of these risks, the premium rate has been reduced by 1%. In addition, a 10% premium reduction has been given for AVLS. A 30% No Claim Bonus has been given.

On 2 June, Phoenix Insurance issued a policy. The certificate number of this policy is – PE/NMT/MV(PV) CERC-00080/06/2026 (Comprehensive).

According to the certificate information, the vehicle was manufactured in 2025. For this 3500 cc vehicle’s policy, a 50% No Claim Bonus has been given. In addition, a 10% discount has been given for AVLS. To reduce the premium, risks of riot and strike damage, earthquake fire damage and vibration fire damage, and flood and cyclone damage have been excluded.

The company issued another policy on 13 January, whose certificate number is – PE/NMT/MV(PV) CERC-0007/01/2026 (Comprehensive). For this vehicle manufactured in 2021, 50% No Claim Bonus has been given on the basic premium, 25% No Claim Bonus on the Act Basic Premium, and a 10% discount has been given for AVLS. In addition, to reduce the premium, risks of riot and strike damage, earthquake fire damage and vibration fire damage, and flood and cyclone damage have been excluded. However, since third-party motor insurance has been discontinued, questions remain about the legal validity of the 25% No Claim Bonus on the Act Basic Premium.

Other companies whose motor certificates granting No Claim Bonus have been obtained include: Union Insurance, Islami Commercial Insurance, Global Insurance, Mercantile Insurance, Islami Insurance Bangladesh Limited, Federal Insurance, Phoenix Insurance, South Asia Insurance Company Limited, Northern Islami Insurance, Crystal Insurance, Bangladesh National Insurance Company Limited, Asia Pacific General Insurance and Prime General Insurance.