A No Claim Bonus, or NCB, is a benefit that insurers offer to policyholders who don't make any claims during a policy year, as a reward for lower-than-expected risk. In health insurance, this often takes the form of an automatic increase in your sum insured for the following year, at no extra premium cost. In motor insurance, it typically appears as a percentage discount on your premium at renewal.
This benefit accumulates over consecutive claim-free years, up to a maximum cap defined by the insurer, but making even a single claim can reset or significantly reduce your accumulated NCB. Because of this, for smaller claims where the amount is close to what you'd lose in NCB benefits, it's sometimes worth evaluating whether filing a claim is genuinely more cost-effective than paying out of pocket and preserving your bonus.