This guide will help you understand what no claim bonus is, how it works, and what it means to the price you pay for car insurance.
To answer your questions on no claim bonus, we use simple scenarios to make sure you understand your car insurance.
What is no claim discount?
No claim bonus (also called a no claim discount) is awarded to you when you have held car insurance for one year without making a claim. Insurers reward you by giving you a bonus (or a discount) on your policy when you renew. This is your no claim bonus.
If you still haven’t made a claim while driving for another 12 months, then you will have 2 year’s no claim bonus, and so on and so forth.
Having multiple years on your no claim bonus can be just one of several indicators that suggest you’re a relatively low-risk driver. This is assessed by insurers and will be reflected in the price you pay for your car insurance.
Is no claim bonus the same as no claim discount?
Yes. No claim discount is the same as no claim bonus and vice versa. Different insurers use slightly different names – but they are one and the same thing. Here at MORE THAN we use the widely recognised term: no claim bonus.
What affects no claim bonus?
Each time you make a claim and your insurer pays the cost from your policy, then your no claim bonus will be affected. Each time a claim is made against you, and your insurer pays the cost from your policy, your no claim bonus is also affected.
Can you take your no claim bonus with you from another insurer?
Yes, your previous insurer will provide a letter or schedule confirming what the level of no claim bonus was at the end of your policy term. So, if you have 5 years no claim bonus with an old insurer, your new insurer will use this information to assess your application.
How do you prove what no claim bonus you are entitled to?
You can prove your no claim bonus by asking your previous insurer to provide the details you need so that they may be sent to your new insurer. They will send you an official letter confirming your no claim bonus status.
How do you build up your no claim bonus?
Building up your no claim bonus takes careful consideration. For example, if you had a minor accident causing a slight scratch on your bodywork, you could claim for the damage against your car insurance policy. But your claim would affect your no claim bonus, and you would lose any discount you have built up.
Alternatively, you could choose to simply repair the minor damage yourself and pay for the cost of touch-up paint from your own pocket.
Claiming for the repair to be done on your policy might make financial sense in the short term, but over the longer term may prove more costly. So, making decisions like this can help you build your no claim bonus.
Remember, you are legally obligated to report any accident you have with your vehicle to your insurer - even if you do not intend to make a claim.
What if you have an accident and you don’t tell your insurer?
If you have an accident you must tell your insurer. It’s illegal to withhold this information. Once they have been informed, you can still decide whether you want to make a claim on your policy.
If you don’t report an accident to your insurer, then you are withholding essential information that could result in your insurance being invalidated. This has serious consequences:
- It can also lead to higher future insurance costs as all insurers check whether you have had your insurance cancelled or declined
- You will be seen as a greater risk, which may lead to a higher insurance premium or your application being declined.
Can a named driver build up a no claim bonus?
A named driver on your policy cannot build up or change your no claim bonus status. However, it will impact your NCB if they have an accident while driving your car. At MORE THAN we do not consider the NCB of a named driver to be a factor in assessing your car insurance costs.
A named driver can only build up their own NCB on their car insurance policy. If they have an accident while driving your car, your policy will be affected. Their policy will not be affected.
How much no claim bonus discount do you get each year?
You could build a sizeable discount if you maintain your no claim bonus. Take a look at the table below to understand how much discount you can build over a period of years.
*Percentage figures taken from MORE THAN data 1 July 2021
What happens when you make a claim?
If you make a claim and the accident was your fault, then you will lose some if not all of your NCB.
If you make a claim and the accident wasn’t your fault, how much you pay for insurance may still increase at renewal. Your insurer may assess that there is a risk of the incident happening again.
For example, you’re not at fault if your car is stolen. However, your insurer might yet increase your premium if they believe that there is a risk of your car being stolen again, because it is still being kept in the same place.
Can you make a claim and not lose your no claim bonus?
There are several types of claims that don’t affect your no claim bonus, including claims to repair your windscreen or adding the wrong fuel to your car. Breakdowns also do not affect your no claim bonus. You’d need to check the wording in your Schedule to make sure your policy includes these conditions.
There are also ways to cover against claims where you are not at fault, such as being involved in an accident with a driver who isn't insured. Here at MORE THAN, we approach this issue by offering Uninsured Driver as standard with our comprehensive car insurance. Having this cover would mean if you have an accident caused by an uninsured driver, your no claim would not be affected.
What is protected or guaranteed no claim bonus?
Here at MORE THAN, having No Claim Bonus Protection means we won’t reduce your NCB regardless of how many claims you make. We always recommend you shop around, but you may find other insurers apply a limit to how many claims are acceptable across your insurance period.
You can purchase No Claim Bonus Protection as an optional extra or add-on to your policy with our comprehensive or third party, fire and theft car insurance. This additional cover is only available when you, the policy holder, have earned at least four years no claim bonus, and protection is subject to eligibility.
We offer No Claim Bonus Protection to protect the number of years you've accrued on your NCB. It does not cover you against car insurance price increases. The price of your insurance can be affected even if an accident was not your fault.
What's the benefit of protecting your no claim bonus?
Here’s a scenario. Say you had amassed 9 years no claim bonus. With MORE THAN you would be entitled to a 44% discount* on your car insurance.
Imagine you then claimed for an accident that was your fault. The following year your NCB would be reduced to 3 years, which would entitle you to a 26% discount*. This percentage drop may make a difference to how much you pay for car insurance.
If you had No Claim Bonus Protection added to your policy before you made the claim, the following year, your NCB would still be 9 years and you could still receive a discount on your car insurance.
*Percentage figures taken from MORE THAN data 1 July 2021.
What happens to your no claim bonus if the accident wasn’t your fault?
A lot will depend on the type of cover you have. But if you make a claim that wasn’t your fault, your no claim bonus may still be affected.
For example, if your car is stolen and the perpetrator is not found, then your insurer may be forced to recover the costs from your policy. This will affect your no claim bonus.
This is where No Claim Bonus Protection offers you an advantage. With Protected NCB, the claim may still be processed through your policy, and this may still increase how much insurance you pay at renewal. Importantly, your no claim bonus will not be affected, so you would still keep the discount you have earned, helping to lower your overall car insurance costs.
What happens to your no claim bonus if you make a claim that was your fault?
You will lose some if not all of your no claim bonus if you’re involved in an accident that was your fault. The other driver is entitled to claim against your insurance. This affects your NCB and will be reflected in the price you pay when you take out insurance.
Again, with the addition of No Claim Bonus Protection, it is likely that the price you pay for insurance will increase at renewal. Importantly, you will still keep the discount you have accrued, which may help to save you money on your car insurance costs.
Is it possible to use no claim bonus on a company car?
If, for example, your company car is listed as being used for business and personal use, then your insurer may accept the transfer of your NCB. At MORE THAN, whether you can transfer your no claim bonus from your company car is subject to eligibility.
What happens to your no claim bonus if you’ve been away from driving?
If you’ve been away from driving for over two years you will lose your NCB.
What is mirrored NCB?
If you’ve built up your NCB on one car you own and you’d like this to be used for another car you own, then it’s possible to mirror your NCB for use across both.
This is only possible if the second car doesn't already have no claim bonus, and is subject to eligibility.
We hope this guide has made no claim bonus crystal clear. To find out more about the types of car insurance we offer take a look at our car insurance page.