If you do not make a claim against your insurance policy during the coverage tenure, then you will be eligible for a discount when you renew your plan. This discount is known as No Claim Bonus or NCB.
Your NCB discount also increases for every subsequent claim-free year. As such NCB discounts can range from 20% to 50%. However, the moment you make a claim, this NCB discount may be retracted completely.
NCB is usually attached to the policyholder and not the vehicle. Therefore, when you buy a new car, your NCB will be transferred to the insurance policy of your new vehicle.