A no claims discount can be a valuable way to lower the cost of your car insurance. Most insurers offer a no claims discount to drivers who have not made a new claim over a set period of time.
What is a no claims discount?
A no claims discount, also known as a no claims bonus, is a discount applied to your car insurance premium based on your recent claims history.
The precise details of a no claims discount can vary between insurers and individual policies. You will generally earn one year of no claims discount for every year you have car insurance without making a claim. The maximum amount of no claims bonus allowed is usually 5 years, although some companies will allow more.
It is also worth noting that the exact amount of discount awarded for each year of claim-free driving can also vary.
Can a no claims discount be protected?
Many policies include an optional extra premium that protects your no claims discount even if you make a claim. There is usually a limit on how many claims you can make in a given time period and still keep your no claims discount. Depending on the policy, this may be a maximum of a single claim or it may be two or more.
If you do make a claim your insurance premium may still go up when it is time for your renewal, even if your no claims discount is protected. This is because your actual claims history is part of the information an insurance company will use to calculate your new premium. A maximised no claim discount can still provide substantial savings though, and many people choose to protect their no claims discount.
Even if you do not have additional no claims discount protection, some companies will not completely wipe out or reset your no claims discount depending on the circumstances and type of claim involved. Some insurers, for example, will drop a maximised 5-year no claims discount down to 2 years when a driver makes their first claim. Claiming for a broken or damaged window or windscreen will not usually affect your no claims discount.
What if I claim for an accident that wasn't my fault?
If you are involved in an accident where the other party accepts fault completely, you may not lose any of your no claims discount. It is important to note that 'no claims' is not always the same as 'no fault' though. A disputed claim, where both parties claim the other was entirely or partially at fault, will usually result in a loss of no claims discount.
Depending on your policy, a no fault accident involving an uninsured driver and claims involving theft, fire and vandalism may also result in you losing some or all of your no claims discount.
Can a named driver build up a no claims discount?
Some insurance companies will allow named drivers to build up a limited amount of no claims discount, which will be applied when they take out a policy in their own name. Typically though, the no claims discount applies only to the main driver or policy holder.
If you have more than one car you need to earn and maintain a separate no claims discount for each. Some companies will, however, give a discount for insuring multiple cars through them. This 'introductory discount' may be based partly on the amount of no claims discount you currently hold on the first vehicle.
How do I provide proof of no claims discount to a new insurer?
Whenever you change your car insurance provider, you can normally transfer your no claims discount.
Your insurance renewal notice will usually contain details of no claims discount earned with your current or former insurer. This can be sent to a new insurer but most will also accept a policy schedule or letter from your previous insurer confirming the details of your no claims discount. Some may merely require the name of your old provider and your policy number and will make the necessary checks themselves.
Not all insurance companies will count claim-free driving of a company car when it comes to awarding a no claims discount. Many will, however, and you will generally need to provide them with a letter from your employer detailing your claims and accident history, the length of time you were insured through the company and confirming that you were the sole driver of the company car.
Many companies will also accept years of claims-free driving built up while driving abroad. You will have to provide valid proof by requesting a letter (preferably written in English) from a registered insurance company detailing your claims history and other details.
It is worth bearing in mind that there may be a time limit for you to transfer your existing no claims discount. If, for example, you get rid of your car and do not drive or have insurance for a number of years, you may not be able to transfer any previously earned no claims discount when you do get a new premium.Back to top