A no-claim bonus acts like a reward given by the insurance company to the insured due to their safe driving. It is an integral part of the policy, which means benefits are provided in the year when there are no claims made by the insured. This could be awarded by way of a discount on bike or car premium for the coming year. This acts as a relief to the policyholders as due to the rising inflation costs, premium rates also tend to increase. It is applicable only on the Own Damage Premium component of the policy and not in the case of third-party insurance. The discount range varies from company to company.