No claims bonus: How to earn, keep and protect your car insurance discount

What is a no claims bonus?

A no claims bonus (NCB), sometimes called a no claims discount (NCD), is a reward for not making a claim on your car insurance. A year is added to your NCB for every year you're insured without claiming. This is applied as a discount to your insurance payments, and the longer you go without claiming, the more you could save.

Most insurers offer a discount that increases with each full year you don’t claim, up to a maximum limit. Most UK insurers cap NCB discounts at 9 years, but it's possible to find providers who will offer discounts for up to 15 years' NCB or more. So, if you've got a clean driving record, it's worth shopping around to find cheaper prices.

How do you get a no claims bonus

You start earning your NCB once you complete a full 12-month policy without making a claim. Here’s how it works:

• You must be the main policyholder. If you're a named driver, you won't usually get a NCB. Some insurers offer named driver no claims discounts. These are rarer, but allow you to build a discount if you're named on someone else's policy and don't make any claims.

• Each full year without a claim adds one year to your NCB. Partial years or temporary cover don’t count - your annual policy needs to renew.

• When you buy a new policy, your NCB transfers to your new insurer. Most insurers confirm your NCB in your renewal documents. If you switch insurers, you’ll usually need to show proof of your NCB to carry your bonus over.

• If you make an at-fault claim, your NCB is reduced.

How many years of no claims do I have?

When you're renewing your car insurance, you'll be asked how many years' NCB you have. This is so your insurer can apply the correct discount. It's important to be accurate with this, as over-estimating your NCB can invalidate your policy. If you're found to have knowingly lied about your NCB, you could be convicted of insurance fraud.

If you’re not sure how many years you’ve built up, there's a few ways you can check it:

• Check your most recent policy documents or renewal notice.

• Check your NCB certificate (usually sent at the end of your policy year to confirm your bonus).

• Contact your insurer and ask them to confirm it.

If you’re switching providers, they’ll likely ask for proof. If you don’t have it, they might put your quote on hold until you provide the documents.

Do you lose your no claims bonus after a claim?

Making a claim doesn’t always mean losing all your NCB, but it can reduce it, especially if you’re at fault.

Here's what usually happens:

• At-fault claims: Your NCB is likely to be reduced. The number of years lost depends on your insurer. For example, you might lose two years off your bonus for a single claim. If you've got more years' NCB than this, it means you'll retain some of your bonus.

• Non-fault claims: If your insurer recovers the full cost from the other party, you'll typically keep your full NCB.

• 50/50 claims: Often treated as fault claims, you’ll usually lose some of your bonus.

• Windscreen claims: Minor repairs won't usually affect your NCB. Full replacements might.

Some insurers allow one claim in a certain period without affecting your NCB, but this doesn’t apply to all. It's worth checking your policy documents to understand how claiming impacts your NCB.

Even if your NCB stays the same, your premium could still go up. Insurers often see any claim as a higher risk. If you're only claiming for a small amount, it's worth weighing up whether it's worth it. The increase to your insurance costs and loss of your NCB might be more than you receive from a payout.

Can you protect a no claims bonus?

Many insurers let you protect your NCB once you’ve built up a certain number of years. For most insurers, this is around 3 or 4 years. Double-check with your insurer what their rules on this are.

NCB protection usually covers you for one or two at-fault claims over a set period of time. For example, you might be protected if you make up to two claims over a 3-5 year period.

Is it worth protecting your no claims bonus?

Some insurers offer no claims protection as an optional add-on for your car insurance. It comes at an added cost, but protects your no claims discount if you need to make a claim.

Even with protection, your premiums may still go up after a claim. That’s because insurers consider your risk level, not just your discount. Having a claim, especially one where you were at fault, increases your risk.

What happens to your no claims bonus if you stop driving?

There might be periods of time where you're no insured on a vehicle. For example, you might not have a car for a few years, or your car might be declared SORN. Your NCB will usually remain in place for up to 2 years without insurance. But, your NCB won't increase while you're uninsured.

If you return to driving within a two-year window, your NCB will usually apply to your premiums. That's as long as you have proof of it.

Every insurer will have different rules around this, so it's best to check how long your NCB is valid for when buying insurance. Some insurers might accept older proof or allow more time, but it’s not guaranteed.

Can you transfer a no claims bonus?

Yes, your NCB is yours, not your insurer’s, so you can transfer it when switching insurers.

To transfer your bonus:

• Ask your previous insurer for proof. This is often on your renewal notice or as a certificate.

• Send this to your new insurer when taking out your policy. Sometimes insurers will transfer this automatically, but it's worth checking.

Some insurers accept NCBs earned on company cars, vans, or motorbikes. Not all insurers do though, especially if you built up a NCB on a different vehicle type. Always check first if you're unsure.

Once your NCB is confirmed, it’ll keep building year by year, as long as you don’t make a claim.