The longer you go without claiming on your car insurance, the more money you’ll save when it comes time to renew your policy.

What is a no claims bonus?

Also called a no claims discount (NCD), a no claims bonus is a discount you receive on your car insurance for not making a recent claim.

You accrue this discount each year, and the longer you drive without claiming on your insurance, the bigger the discount you’re likely to get on your premium when it comes time to renew.

Fo example, if your annual insurance premium is £800 and you have a 25% no claims discount, you would only pay £600.

How does a no claims discount work?

You build up your no claims discount over time. The longer you go without making a car insurance claim, the bigger your no claims discount will be. You could start on a 5% discount after one year of no claims and this could grow to 10% after two years of no claims, and so on.

The exact way it’s worked out depends on your insurance provider. For example, some will group years together and may give the same discount from two to five years without making a claim. You’d then jump into the next bracket after six years and get the next level of discount. Others give a new percentage reduction after each year of driving without making a claim.

It’s important to note if you choose any add-ons to your policy, these won’t be covered by your no claims discount. It also isn’t applied to any admin fees either.

On average, your car insurance premium may look like this depending on your number of years NCD:

*For the period 1 January 2025 to 28 February 2025, 51% of customers paid the above premiums or less for their car insurance when purchasing car insurance through the Asda Money car comparison serviced provided by Vast Visibility Limited

How do I build up a no claims discount?

You build up a no claims discount by not claiming on your policy. This is the case whether you have fully comprehensive car insurance, third party fire and theft or third party only car insurance.

Each year, your no claims discount increases to a level set by your insurer. There is also a maximum number of years you can build your bonus for, which is usually 15, although it’s up to each individual insurer.

How long do no claims discounts last?

Your no claims discount usually lasts for as long as you’re insured and don’t make a claim.

If you switch from one insurance provider to another, you should be able to bring your bonus with you – just make sure you check this before switching. But whilst you can bring the number of years or your no claim history to your new insurer, the exact percentage applied to the bonus will be in line with the new insurer’s no claims policy.

If you’ve been uninsured for more than two years, you may lose your no claims bonus. You may have to start again from the beginning or reduce the number of years.

How do I get proof of my no claims discount?

If your new insurer wants proof of your no claims discount, you can get this from your previous insurer. You might get it automatically when you end your policy, but if not, you can ask for it. When you apply for new car insurance, often insurers will be able to find this information using claims data and won’t ask for proof from you.

How will claiming on my insurance affect my no claims bonus?

If you make an insurance claim, this will impact your bonus. But you won’t necessarily lose the entire amount for just one claim.

Your insurer may reduce the discount to a previous level, for example cutting it from six years to four years.

What claims don’t affect my no claims discount?

There are some situations where claiming on your car insurance doesn’t affect your no claims bonus. Small claims like cracks in the windscreen or lost keys usually don’t impact your bonus. Your bonus also won’t usually be affected if you claim against an uninsured driver or claim on your breakdown cover.

What is no claims discount protection?

With no claims discount protection, you can protect some of your no claims discount even if you make a claim. This protection comes as an add-on for your car insurance and will cost extra.

It basically means you can claim on your policy without losing 100% of your no claims discount. Just remember that some insurers won’t let you protect your discount if it’s less than four years.

How does no claims discount protection work?

With no claims discount protection, if you claim on your insurance your no claims discount will reduce to whatever is set out in the policy. In most cases you’ll lose a year or two. So, if you had a no claims discount of eight years, this could be reduced to six or seven if you had to make a claim.

Just remember, whilst you protect your no claims discount it doesn’t mean that your premium won’t go up.

What happens if I don’t protect my NCD?

If you don’t have no claims discount protection in place and you make a claim on your car insurance, this will affect your discount. In some cases, you may lose it entirely and in others it may just be reduced. This will depend on your insurer, the level of your existing no claims discount and the number of claims you make.

Can I use my no claims discount on multiple cars?

No, typically you won’t be able to use an existing no claims bonus on multiple cars, even if you have a multi-car policy. Each car on the policy will have its own bonus and you can’t transfer these to other cars on the policy.

Can named drivers build up a no claims discount?

Usually no. If you’re a named driver on a car and not the main driver, typically you can’t build up a no claims discount. If you were to take out your own policy on the same car, you would be able to build up a discount, but this would likely be a more costly option.

Can I transfer my no claims bonus from another provider?

Yes, if you switch car insurance providers, you’ll usually be able to take your existing no claims bonus with you. Your new provider will likely ask for proof of it within a set number of days.