A no-claims bonus, or no-claims discount, is a premium discount you build by holding insurance without making claims.
A no-claims bonus is a discount linked to your claims record. It is often shortened to NCB. It can also be called a no-claims discount, or NCD.
You build it by holding an insurance policy and not making a claim during the policy year. The Financial Ombudsman Service explains that a policyholder is awarded one year of no-claims bonus for every year of driving without making an insurance claim.
For car and van insurance, a no-claims bonus can be an important part of the quote. It is not the only factor, though. Insurers may also look at your vehicle, postcode, age, use, mileage, claims history, convictions, occupation, and other details.
Your no-claims bonus usually grows one year at a time. The more claim-free years you have, the larger the discount may be.
The exact discount is not fixed across the market. The ABI says no-claims discounts vary by insurer, and each insurer can set its own scale and maximum number of years.
A higher no-claims bonus may help reduce your premium, but it does not guarantee a lower price every year. Your renewal price can still change because of wider rating factors, your own details, market costs, or changes to the policy.
If you are a named driver rather than the policyholder, you usually will not build your own no-claims bonus. MoneyHelper notes that named drivers normally do not earn their own bonus on someone else’s policy.
A fault claim can reduce your no-claims bonus if it is not protected. The Financial Ombudsman Service says this is often by two years, but the exact rule should be set out in the policy wording.
A claim may be treated as a fault claim if your insurer cannot recover its costs from another party. This can happen even when you did not think the accident was your fault. If the insurer later recovers its costs and records the claim as non-fault, it should normally restore the no-claims bonus in accordance with the policy terms.
Some claims may not affect your no-claims bonus. For example, MoneyHelper says some windscreen repairs may not affect it. You should still check your own policy terms, as rules can vary.
Protected no-claims bonus is an optional add-on. It may let you make a set number of claims within a set period without reducing your no-claims bonus. The ABI explains that some insurers offer protected discount policies with limits on how many claims can be made.
Protection does not mean your total premium is protected. It usually protects the discount level, not the final price of your insurance. Your renewal premium could still rise after a claim, depending on the insurer and the policy.
If you switch insurer, you may need to prove your no-claims bonus. Proof may be shown on a renewal notice, cancellation letter, online policy account, or document from your previous insurer.
Insurers can have different rules on how old the proof can be. The Financial Ombudsman Service says most insurers accept a no-claims bonus that is less than two years old, but some may use different limits.
You should make sure the number of years you give matches the proof you hold. Our guide on why accurate details matter when getting a car insurance quote explains why insurers may check the details before or after a policy starts.
A no-claims bonus can help with car or van insurance, but it does not remove the need to disclose claims or accidents. MoneyHelper explains that you need to give accurate and up-to-date details, including previous claims or accidents.
For consumer insurance, you must take reasonable care not to make a misrepresentation when buying or renewing a policy. The Financial Ombudsman Service explains that if a customer is unsure of an answer, it is reasonable to expect them to find out.
This matters because wrong or incomplete information can affect the quote, the policy, and how a claim is handled.
At Got You Covered, we arrange car insurance, van insurance, and convicted driver insurance for a range of customers.
We may be able to help if you have a low or zero no-claims bonus, previous claims, or motoring convictions. This depends on your full details, the insurer, and the policy terms.
A no-claims bonus is a discount you build by not claiming on your policy. It can help reduce the cost of car or van insurance, but the value and rules can vary by insurer.
Keep proof of your bonus, check your policy wording, and answer quote questions with care.
