Each claim-free year can cut your car insurance premium. Knowing how the discount works helps you decide when to claim.
Key things to know
- A no-claims discount (NCD), or no-claims bonus, reduces your premium for each year without a claim.
- Making a claim usually reduces your NCD, often by a set number of years.
- Protecting your NCD keeps the discount level, but it doesn’t stop your premium rising after a claim.
- You’ll usually need proof of your no-claims years when you switch insurer.
A no-claims discount (NCD), also called a no-claims bonus, rewards claim-free years with a lower car insurance premium. It can make a big difference, so it’s worth understanding.
How it builds
Each year you’re insured without making a claim usually adds a year of NCD, up to the maximum your insurer recognises. The discount for each year varies by insurer.
What happens after a claim
| Situation | Typical effect on your NCD |
|---|---|
| At-fault claim | Reduced, often by two or more years |
| Non-fault claim, costs recovered | Usually unaffected |
| Non-fault claim, costs not recovered | May be treated as a claim |
| Windscreen claim | Often doesn’t affect NCD, depending on the policy |
Protected no-claims discount
For an extra cost, you can protect your NCD, which lets you make a set number of claims without losing years of discount.
Watch for
Protecting your NCD doesn’t freeze your premium. After a claim, your insurer can still increase the price because your risk profile has changed.
Proving your no-claims years
When you switch insurer, you’ll usually need proof of your NCD, such as a renewal notice or letter from your previous insurer. Keep these documents safe.
Worth doing
For small damage, compare the repair cost with your excess and the likely rise in premium before claiming. Paying for minor repairs yourself can sometimes cost less overall.
Weighing up a claim
Your NCD is valuable, but it’s there to be used when something serious happens. Our guides to making a claim and cheaper car insurance explain the rest of the picture.
Questions answered
Does a claim that wasn’t my fault affect my NCD?
If your insurer recovers all its costs from the other side, your NCD is usually unaffected. If it can’t, it may be treated as a claim.
Can I use my no-claims discount on a second car?
Usually not. An NCD normally applies to one policy at a time, though some insurers offer multi-car discounts.
How long does a no-claims discount last if I stop driving?
Insurers often accept NCD earned within the last two years. After a longer gap, you may start again.
This guide is general information, not financial or insurance advice. Policies differ, so always read your own policy documents and check with your insurer. If you have a complaint, your insurer’s complaints process and the Financial Ombudsman Service can help.