When shopping around for car insurance, especially in your first few years of driving, you might be surprised by the cost of insuring your vehicle. However, as you get more experience behind the wheel without experiencing any accidents or incidents, you will slowly build up your no claims discount and be rewarded for being a safe driver.

What is a no claims discount?

As you spend more time driving without getting into an accident, you’ll build up time where you haven’t needed to make a claim on your insurance policy. This is a clear indicator to insurance providers that you drive safely and pose less of a risk to other drivers.

This will typically see you rewarded with lower insurance premium quotes when it comes time to renew your insurance policy, usually in the form of a percentage discount off your total quote.

Every year that goes by without you needing to make a claim, the bigger your no claims bonus might be. The discount offered to drivers will vary depending on how long you’ve gone without making a claim and the insurance provider themselves.

Will making an insurance claim mean I lose my no claims discount?

If you make a car insurance claim and your provider pays out, it might result in you losing some or all of your no claims bonus. If both you and another driver are at fault, or cannot decide who is ultimately responsible, both drivers may end up losing their no claims bonus. However, if you made a claim for an accident which wasn’t your fault then your no claims shouldn’t be affected.

Depending on how many years you’ve held your no claims bonus for and who your provider is, you may be moved down on your insurance provider’s ‘step-back’ scale if you do make a claim.

Providers have different steps of no claims discount which you can slowly move up over the years which are free of claims. If you end up making a claim for an accident you were in, you might be moved back down the scale and reset your discount to what it was in previous years.

An example would be a driver who’s built up around 6 years of no claims, giving him the maximum discount, but an accident could see him moved back down to just 2 years of no claims discount to reflect the severity of the incident.

How can I protect my no claims discount?

After spending so long building up your no claims discount by being a trustworthy, safe and reliable driver, the idea of losing it over the smallest accident can sting a little. Some insurance providers give their policyholders the option of protecting their no claims bonus as an optional extra within their insurance.

This would let you potentially make a set number of claims within a year without putting your no claims bonus at risk and can offset a possible rise in your insurance premiums as a result of the accident, as your claim history is still used to calculate your premiums when looking at car insurance quotes.

Does my no claims bonus guarantee cheap car insurance?

While building up a good amount of no claims bonus can help keep your insurance premiums low, it doesn’t stop the gradual rising cost of car insurance. Using a price comparison tool will help you find the ideal policy for you at the best price possible, letting you make the most of your no claims bonus by combining it with a reasonably priced policy. You can also look at other methods of getting cheaper car insurance, such as making the most of multi-car discounts or improving your car's security.