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No claims bonus (NCB), also known as your no claims discount (NCD), is awarded once you have had car insurance for a year or more, without making a claim with your insurer. You’ll receive a discount based on the length of time you have gone without claiming on your insurance.
It carries over from one provider to another, but if you stop driving, it will usually only remain valid for up to two years.
Though every provider has slightly different rules on how no claims bonus works, generally for each you drive without a claim, you’ll receive an additional year of no claims discount.
Providers might not provide the discount in the same way – some may increase the discount each year, though often years are bracketed together. For example, you may receive the same discount at years 3, 4 and 5 of your no claims discount, then a higher discount when you go into year 7.
It's important to check the banding for your insurer when it’s time to renew – because of the variations, people can save up to ~£388 [1] by switching insurance providers. You can compare insurance quotes here.
When you took out your insurance policy your provider would have sent you documentation about your policy. Your no claims discount will be in the documentation.
If you can’t find your documentation, you can contact your insurer and ask for it to be sent to you.
If you need to provide proof of your no claims bonus, this can be provided by your insurer – you will usually only be able to get this proof when you’re in the process of renewing your policy, or you have already cancelled your policy.
You can usually find your no claims bonus in the renewal letter your existing insurer has sent you. If you have cancelled your insurance policy already, check the cancellation documents for your no claims discount.
If neither of these contain the information you need, then you can request the proof of your no claims discount from your insurer, who is legally required to provide this to you.
If you make a claim and your insurer pays, you no claims discount is usually reduced by 2-3 years, though this depends on the insurer. If you have more than one claim, this will likely be reduced further and depends on the insurer. In the insurance industry this is known as a ‘step-back’
You can find a breakdown of what happens to your no claims bonus following a claim in the documentation your insurer sends when you take out your policy.
Some types of claims may not result in your no claims bonus being impacted. Usually this applies to windscreen claims, lost keys, and breakdown claims, though it’s important to check your policy documents to be sure.
It also depends on whether you have protected your no claims bonus.
No claims discount protection is an optional add onto insurance premiums that many insurers provide. It will allow you to claim one (or more) times per year without having an impact on your no claims bonus.
You will pay a bit more for your policy, but it means that if you do need to claim, it will lessen the impact on your no claims bonus.
You should consider protecting your no claims bonus if you have built up many years of no claims bonus. It’s important to have a look around because the cost varies across insurers. You can check and compare policies with Caura here.
Having no claims discount protection does not mean that your premium won’t go up. In the event of a claim, your premium will likely increase but you’ll still get a discount compared to if you did not have your NCD protected.
For example, your insurer could have worked out your premium should be £1,000, but you have accrued a 50% discount, so you pay them £500. Following a claim, your insurer decides your premium should be £1,500. You still get the discount of 50%, so you now pay £750.
[1] Which? article ‘Don’t let your car insurance policy auto-renew. Accessed21-Feb-24
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