What is a No Claims Discount (NCD) and Where Can You Access it?

A No Claims Discount (NCD), also called a No Claims Bonus (NCB), is one of the major benefits for claim-free drivers. It’s a reward insurers give you for not making any claims on your car or van insurance. Each year you drive without claiming, your discount grows, often saving you a lot on your premium. In this post, we’ll explain exactly what NCD/NCB means, how it works for car (and van) insurance, why it’s so valuable (especially for higher-risk drivers), and how and where you can get proof of your no-claims bonus.

What Does No Claims Discount (NCD) Mean?

In simple terms, a No Claims Discount is a reward for not making insurance claims. For every year you hold an insurance policy and don’t file a claim, your insurer will award you one “year” of NCD. The more consecutive claim-free years you have, the bigger the discount you earn on your annual premium. Essentially, you’re proving to the insurer that you’re a lower risk, so they charge you less in return.

• NCD vs. NCB: Both No Claims Discount (NCD) and No Claims Bonus (NCB) refer to exactly the same thing: a reduction on your premium for being claim-free. The terms are used interchangeably by insurers, so whether you see NCD or NCB, it is the same reward.
• Typical Discounts: The discount increases each year you remain claim-free. Every insurer sets its own scale, but the principle is that more claim-free years = bigger discount.
• Maximum NCD: Most insurers cap the no-claims bonus after a certain number of years, often 5 years, sometimes up to 9 years. This means, for example, that if the maximum they recognise is 5 years, once you’ve earned 5 years of NCD, additional claim-free years won’t increase the discount further. You’ll still keep the maximum discount, but it won’t grow beyond the insurer’s limit.

Wondering what else affects your premium? See our guide on What Affects Your Car Insurance Premium for other factors, such as age, vehicle, and driving history.

How Does a No Claims Bonus Work?

Your NCD is essentially a percentage off the base price of your insurance. For example, if a policy normally costs £800 and you have a 25% NCD, your price could drop to £600. When you get a quote, insurers ask how many years of NCD you have, then apply the corresponding discount to calculate your premium.

Here’s how it works in practice:

• Earning NCD: You build up your no-claims bonus by holding insurance and not claiming on it each year. This applies to each policy you have. For instance, if you have one car insured and you go claim-free for 3 years, you earn a 3-year NCD on that car’s policy. If you also have a van insured separately, that policy will have its own NCD record. In other words, NCD isn’t shared across multiple vehicles at the same time; each policy earns its own discount.
• Making Claims: If you make a claim, you will typically lose some or all of your no-claims bonus. The effect depends on the insurer and the situation. Often, one at-fault claim might knock you back by 2 years of NCD (e.g. if you had 5 years, you drop down to 3). More than one claim in the year can zero out your NCD entirely.
• Non-Fault Claims: If the claim wasn’t your fault and the cost is fully recovered from a third party, your NCD usually remains intact. However, certain types of claims (like windscreen repairs) may be excluded and not affect your NCD; it varies by policy. Always check your policy terms to see which claims might not count against your bonus.
• Named Drivers: Importantly, only the policyholder earns the NCD. If you’re just a named driver on someone else’s car insurance, you do not accumulate your own no-claims years. For example, if you spent four years as a named driver on your partner’s policy, you still have 0 NCD years in your own name at the end of that. NCD sticks with the person who holds the insurance policy.
• Keeping Your NCD (No Gaps): No-claims bonus has a shelf life. If you stop driving or cancel your policy and go uninsured for a while, your NCD doesn’t last forever. Most insurers accept only NCDs that are less than 2 years old. So if you had, say, 5 years NCD but then sold your car and didn’t have insurance for over two years, that NCD expires. You’d likely have to start from zero if you insure a vehicle again after that gap.
• Protecting Your NCD: Because one claim might significantly reduce your discount, insurers offer No Claims Discount Protection. This is an optional add-on you can purchase, which lets you make a limited number of claims without losing your NCD status. Typically, protected NCD allows maybe one claim per year (or two within three years) without affecting your no-claims years. However, and this is important, NCD protection doesn’t guarantee your price won’t go up. It just preserves the discount itself. After an accident, your base premium can still rise (because you now have a recent claim on record), but with protection, you wouldn’t lose the years of no-claims discount you had accumulated. Whether protecting your NCD is “worth it” depends on your situation; it can be a smart safeguard if you have many years built up.

For a deeper explanation, MoneyHelper (the UK’s free money guidance service) has a good overview of how a no-claims bonus works, including typical discount amounts and the option of NCD protection.

How to Find or Prove Your NCD (Accessing Your No-Claims Bonus)

Existing Customers: If you’re an existing Got You Covered customer and you renew with us, your no-claims years will be applied automatically to your renewal quote. If you ever need proof of your NCD (for example, if you move to another insurer), you can request an NCD proof letter from us or your insurer.

Switching to a New Provider: When you take out a new insurance policy and declare your NCD, the new insurer will want to verify those years. Typically, you’ll need to provide proof of your no-claims bonus within a certain time frame after you start the policy. Often this is around 7 to 21 days (about 1 to 3 weeks), though it varies by insurer. If you miss the deadline, the new insurer might remove any no-claims discount they applied (meaning your premium will increase), or, in the worst case, the policy could be cancelled. So it’s important to send your proof promptly.

Where to get your NCD proof: You usually obtain proof from your previous insurer. Here are common ways to access it:

• Renewal Notice: Check the renewal letter or email from your last insurer (the one you get when your policy is due for renewal). These often include how many years of NCD you’ve accumulated so far. If you have an online account with your insurer, you may be able to download your renewal notice there.
• Policy Documents / Cancellation Letter: If you’ve recently cancelled or switched insurance, the insurer’s cancellation notice / policy closing documents should state your NCD years. Look for any document that explicitly mentions “No Claims Discount” or “No Claims Bonus,” along with the number of years – it might be in a PDF they sent when you ended the policy.
• Contact Your Insurer: If you can’t find the info in your papers, just contact your previous insurer’s customer service and ask them for a Proof of No Claims Bonus letter. They are very familiar with this request plus should mail or email you an official letter showing the number of NCD years you earned with them. (Have your old policy number handy when you contact them, to speed things up.)

Once you obtain the proof, you forward it to your new insurer (often, you can upload it to their web portal or email it). Always make sure you get a confirmation from the new insurer that they’ve received and accepted your NCD proof. If you don’t hear back within a week of sending it, follow up with them so you don’t accidentally end up without the discount.

Keep copies of your NCD proof for your records. It might come in handy if there’s any dispute or if you switch again. Also note that your NCD proof is usually valid for 2 years after your last policy ended. After that, insurers won’t accept it (as mentioned, no-claims bonus expires if you’re uninsured for over two years).

Why Is Your No-Claims Discount So Important?

A no-claims discount can save you hundreds of pounds on your insurance. It’s often one of the biggest factors reducing your premium. For many drivers, especially those with several years' accrued NCD, the NCD is the reason their insurance might be, say, £400 instead of £800. It rewards safe drivers by making insurance more affordable.

Some key benefits of having a healthy NCD include:

• Significant Savings: Even going from 0 to 1 year NCD can result in significant savings. Each additional claim-free year adds a further discount (diminishing a bit at higher levels). Insurers see you as a low risk when you haven’t claimed in years, and your wallet benefits from that.
• More Options: Drivers with little or no NCD (such as newcomers or those with lapses) may find that some quotes are very high. In contrast, if you have a strong NCD, more insurers will be willing to offer you a policy at a reasonable price. In essence, a good NCD opens the door to cheaper quotes from more providers.
• Reward for Safe Driving: It’s basically a loyalty bonus for being a careful driver. Avoiding accidents and claims not only keeps you safer, but it tangibly rewards you at renewal time. Over the years, retaining a clean driving record and maximising your NCD have been two of the best ways to keep insurance costs down.

NCD for Convicted and High-Risk Drivers

If you have past motoring convictions or points on your record, you’re likely paying more for insurance due to being labelled higher-risk. In these cases, having some NCD built up becomes all the more critical to soften those high premiums. Drivers with serious convictions (such as a drink-driving ban or an IN10 conviction for driving uninsured) usually face steep surcharges on their insurance. A healthy no-claims discount can help offset those costs to a degree.

However, convicted drivers regularly deal with challenges with NCD:

• Losing NCD after a Ban: If your conviction led to a driving ban and you couldn’t drive or insure a car for a couple of years, you might lose your previously accumulated NCD. Insurers generally only honour NCD up to 2 years old, so, for example, a drink-driving conviction (code DR10) that came with a 2+ year ban could mean any no-claims bonus you had is no longer valid. Unfortunately, you’d be starting from scratch once you’re back on the road.
• Higher Starting Premiums: Convictions such as DR10 or IN10 imply higher base premiums due to the associated risk. With zero NCD on top of that (if you had to start over), the initial quotes can be very high. This is when seeking a specialist insurer or broker really helps, as they can find policies customised for high-risk drivers and advise on rebuilding your NCD.
• Importance of NCD Protection: For those who have rebuilt some NCD after a conviction, protecting it is wise if offered. You really don’t want to lose it again if an at-fault claim happens. As mentioned earlier, NCD protection can allow a claim or two without forfeiting your discount (though your premium may still adjust).

The good news is that there are insurers (like us) who specialise in convicted-driver insurance. These providers understand your situation and will work to get you covered even if you have little or no NCD left. At Got You Covered, our Convicted Driver Insurance team frequently helps drivers with past convictions find affordable coverage. We offer dedicated products such as Drink Driver Insurance for those with drink-driving offences, or IN10 Insurance for those caught driving without insurance. We know that after a setback, every bit of no-claims discount helps you get back on track.

Learn more about our support for drivers with convictions in What to Do If You’ve Had a Previous Motoring Conviction, including tips on getting insurance with points, DR10, IN10, TT99 codes, etc.

Conclusion

Your No Claims Discount is hard-earned and extremely valuable. It’s basically your reward for being claim-free, and it can save you a substantial amount on car or van insurance. Whether you’re a new driver starting from zero or an experienced driver retaining a 5+ year NCB, it pays to understand how NCD works and how to keep it. Always aim to drive safely and avoid claims when possible, because each claim-free year is money back in your pocket through lower premiums. And if you do have to claim or have a lapse in cover, don’t be discouraged. You can start rebuilding your discount again over time.

Existing customers: remember, you can always request your NCD proof from us if needed. New customers: if you’re shopping around, make sure to factor in your NCD and get it verified so you receive the discount you’re entitled to. And if you’re ever unsure or need help, for instance, if you have a conviction or a unique situation, we’ve got you covered. Our specialists at Got You Covered are here to help you find the best deal, no matter your NCD status or driving history.