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No Claims Bonus Explained

No-claims bonus (NCB), otherwise referred to as No Claims Discount, is a way you can cut the cost of car insurance. The terms for no-claims bonus vary from insurer to insurer so it’s important to shop around and read the small print to know exactly what’s included in your policy.Read our handy guide on all things NCB, covering commonly asked questions about the discount.

Contents

  • What is a no-claims bonus?
  • What happens to a bonus in the event of a claim?
  • Will my no-claims bonus reset if I’ve just changed car?
  • How do I get proof of no-claims bonus?
  • Can I protect my no-claims bonus?
  • Can my no-claims bonus expire?

What is a no-claims bonus?

For every year you drive without making a claim, insurers will give you one year’s no-claims bonus which will give you a discount on the cost of your policy at renewal. The more years of claim-free driving the greater the discount, although there is usually a maximum period insurers will consider for your NCB.

What happens to no-claims bonus In the event of a claim?

If you make a claim which is then paid out, you’ll either partially or fully lose your no-claims bonus depending on your insurance provider’s terms. For instance, if it’s your first claim you may lose two years of your NCB but if it’s your second then you may lose your full bonus. There are exceptions if the accident was not your fault. In this case your insurer may be able to reclaim the pay-out from the other person’s insurer and your no claims bonus will not be affected. However, if the fault cannot be agreed on, the cost of the claim will usually be split between insurers and both driver’s no claims bonus could be affected. If you are found to not be at fault later down the line while paying for a policy with a reduced NCB, then your discount could be reinstated and the extra premiums paid refunded.

Will my no-claims bonus reset if I’ve just changed car?

No, your no-claims bonus won’t reset when you change car. The bonus is earned and held by the insurance policy holder and not the vehicle they drive.

How do I get proof of no-claims bonus?

When switching your insurance provider, they’ll often request proof of your no-claims bonus. Your previous insurance provider will be able to supply this.

Can my no-claims bonus expire?

Your no-claims bonus will be valid for two years after the expiration of your insurance policy. Once this period is over your NCB will be reset. The exact period differs from insurer to insurer, so if you’re anticipating a gap in your insurance it’s important to consider this when choosing a provider. If you’d like to find out more information about all things motor insurance, have a browse through the driving segment of our blog.

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