What is a no claims bonus?
A no claims bonus is a reward, usually in the form of a discount on your premiums, for not claiming on your insurance during your policy year.
How does no claims bonus work?
Each year you are insured and do not make a claim, you will earn an extra year's worth of no claims discount which can make a big difference to your car insurance premiums over time.
You will earn a no claims bonus regardless of whether you have fully comprehensive car insurance or basic third party, fire and theft cover.
The longer you have been insured without making a claim, the greater your no claims bonus will be and the bigger the discount you are likely to be eligible for.
How long does no claims bonus last?
A no claims bonus will last for as long as you avoid making a claim on your insurance policy. It will also increase for every year that you do not make a claim.
As soon as you make a claim you will lose your no claims bonus, unless it was protected in some way (more on that later). Once this happens you will need to start building your no claims history afresh.
How much no claims bonus can I build up?
Most insurers will allow you to build a 5 years NCB, with the discount getting higher for each year you do not claim. However, a few insurance companies can give a discount for a no claims period of up to 8 years.
Does the claim have to be my fault?
It is worth mentioning that not all claims will result in you losing your no claims discount - having cracks in your windscreen filled, for instance, does not usually count.
However, if you make a claim because of an accident you cause, theft or vandalism, it is likely to affect your no claims discount.
Even if an accident is another driver's fault but they do no admit liability, your NCB could be lost or reduced. It is only if your insurance company is able to recover all of the costs from the other driver (or their insurer) that your NCB will be unaffected.
How can I prove my no claims bonus?
The easiest way to prove your no claims entitlement is to use your car insurance renewal quote.
Each year, usually about a month before your insurance is due for renewal, you insurance company will write to you with a renewal quote.
This quote will detail the length of your no claims bonus and can be used to show other insures how long you have been insured without making a claim.
If you do not have a renewal quote which specifies your no claims entitlement, then you should be able to write to your previous insurer for written proof of your no claims. They will generally send you a no claims bonus certificate that you can use as evidence of your claim free driving history.
Do insurance companies check no claims bonus?
Yes, your insurance company will usually ask to see proof of your no claims bonus before a discount is added to your policy. At the least they will ask for details of your previous insurer and policy number so they can check direct with them.
If you apply for an insurance policy stating you have a certain level of no claims and cannot prove this, you will end up paying the full price, and may even be charged for giving false information, find that your insurer will not pay out if you need to claim or be reported for fraud.
What is protected no claims bonus?
A protected no claims bonus is where you pay a small amount on top of your premium to keep your existing no claims discount even if you have to make a claim.
However, most protected no claims bonuses will only allow you to make one or two claims per year without forfeiting your discount.
Use our comparison to find an insurance policy that offers a discount for your no claims period. Make sure you pick a policy that provides all of the cover you need for the lowest possible premium price rather than just focusing on finding the biggest discount you can; this guide looks at how to cut your costs.
Should I protect my no claims bonus?
This really depends on your circumstances. Paying to protect your no claims bonus will mean you save less money on your insurance premiums as you usually need to pay for it as an extra.
However with discounts of up to 70% available, losing your many years of no claims could be very costly should you need to make a claim.
Ultimately whether you pay to protect your no claims bonus will depend on how many years you have already and whether you feel the extra cost is worth paying.
Our guide features more information to help you decide if you should protect your no claims discount.
Should I avoid claiming to protect my no claims bonus?
If your car sustains damage that will not be too expensive to repair, it may be cheaper in the long run to pay for it yourself.
For example, if the no claims discount you have built up saves you £300 every time you renew your car insurance, a claim that will contribute less than this (after you have paid the excess) is probably not worth making.
Can you have no claims bonus on two cars?
You cannot usually build a no claims discount on two cars simultaneously. However, this is theoretically possible if the cars are insured on the same policy, or if the insurer extends your no claims discount to a second car after a set period of time has passed.
You will sometimes be able to transfer a no claims bonus on a company car to your personal car insurance policy too.
Do you get no claims bonus as a named driver?
This will depend on your car insurance policy. In most cases named drivers will not accrue a named driver no claims bonus as this discount is reserved for the main policy holder.
However, some car insurance policies have begun extending no claims discounts to named drivers, although they may not be accepted by other insurers when you change policies.
Do I lose my no claims bonus if...?
... I claim on my insurance?
Yes, in most cases you will lose your no claims discount if you need to make a claim on your car insurance although you may be able to keep your no claims discount if you have paid to protect it.
... I am hit by an uninsured driver?
This depends entirely on your car insurance policy. Some insurers will protect your no claims discount if you are hit by an uninsured driver but most do not.
This means that if you need to make a claim to cover damage caused by an uninsured driver then you could lose your no claims if it is not protected.
... I need my windscreen repaired?
Repairing small chips or cracks should not affect your no claims discount if you used an approved windscreen repair service.
However, if your windscreen is badly damaged and needs replacing then this will not be classed as car maintenance but as a standard claim, meaning you may lose your existing no claims discount if you pay for it through your insurance.
... I'm involved in an accident that is not my fault?
This will depend on whether your insurance provider can reclaim your costs from the other driver involved in the accident.
If the other party accepts liability and their insurance will pay to cover your repair work then your insurance will be unaffected and your no claims will stay in place.
However, if you need to put the claim through your insurance your no claims discount could be affected.
... a named driver on my policy has an accident?
Again this will depend on your car insurance policy but in most cases you will lose your no claims discount if you need to claim for an accident while a named driver is behind the wheel.
If you are a named driver insured on a policy that allows you to build up a no claims discount your no claims history could be affected if the main driver needs to make a claim.
No claims bonus expiry dates - how long do they last?
A no claims bonus does not usually have an expiry date. However, if you take a break from driving and do not have any insurance for several months, you may find it more difficult to use your existing no claims discounts when you need to renew.
While there is no set expiry date for your no claims, most insurers will only accept proof of your no claims discount if your previous policy expired less than 2 years ago.
Some insurers may only accept no claims for up to 12 months after your previous policy has ended, while others allow up to 3 years, so make sure to shop around to check if you can use your no claims if you have had a gap without cover.