Protecting customers with insurance since 2001

Protecting customers with insurance since 2001

No claim bonus explained

  • 5, Aug 2021
  • Read time: 12 mins

This guide will help you understand what no claim bonus is, how it works, and the way it can affect the price you pay for car insurance.

Minor car accident

What is no claim discount?

No claim discount is awarded to you when you hold car insurance for one year without making a claim, and increases each year. So, if you haven’t made a claim while driving for another 12 months, you'll have two year’s no claim bonus. Insurers reward you with a discount on your policy when you renew.

Having multiple years on your no claim bonus can be one of several indicators suggesting you’re a relatively low-risk driver. This is assessed by insurers and reflected in the price you pay for your car insurance. 

Is no claim bonus the same as no claim discount?

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 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 I take my no claim bonus with me from another insurer?

Yes, you can ask your previous insurer to provide information confirming the level of your no claim bonus when your policy with them ends.

How do I prove what no claim bonus I am entitled to?

You can use the information provided by your previous insurer to let your new insurer know what level of no claim bonus you have.

How do I build up my no claim bonus?

Building up your no claim bonus takes consideration. For example, if you had a minor accident causing a slight scratch on your car's bodywork you could claim for the damage using 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 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 long term may prove more costly.

Making decisions like this can help you build your no claim bonus.

What if I have an accident and I don’t tell my insurer?

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.

Once they have been informed you can still decide whether to make a claim on your policy.

If you don’t report an accident to your insurer you are withholding essential information that could result in your insurance being invalidated. This has serious consequences:

  • It can 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 an additional named driver on my policy build up a no claim bonus?

No. Only you as the policyholder can build up no claim bonus on your car insurance.

Any additional named drivers on your policy cannot build up your no claim bonus status. However, it will impact your no claim bonus if they have an accident while driving your car.

At MORE THAN we do not consider the no claim bonus of any additional named drivers to be a factor in assessing your car insurance costs.

How much no claim bonus discount will I 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 August 2022

Table showing no claim bonus discounts

Does no claim bonus impact my premium?

Your no claim bonus is one of many considerations that affects the cost of your car insurance premium. There are other considerations, such as:

  • Your driving history
  • The type of car your drive
  • Your age also affects your car insurance costs
  • How costly repairs are to make to your vehicle
  • Having a clean licence with no penalties awarded. 

What happens to my no claim bonus when I make a claim?

If you make a claim and the accident was your fault then you will lose some, if not all, of your no claim bonus.

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 I make a claim and keep my 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. Check the wording in your policy documents to make sure these conditions are included.

What is protected or guaranteed no claim bonus?

Here at MORE THAN, having No Claim Bonus Protection means your no claim bonus won't reduce regardless of how many claims you make. We recommend you shop around but you may find other insurers apply a limit to how many claims are acceptable across your insurance period.

No Claim Bonus Protection 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 my 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 39% 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 25% 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 August 2022

What happens to my no claim bonus if the accident wasn’t my fault?

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 your insurer may be forced to recover the costs from your policy. This will affect your no claim bonus.

This is where adding No Claim Bonus Protection to your policy offers an advantage; even though how much insurance you pay at renewal may increase, your no claim bonus will not be affected.

You would keep no claim bonus, helping to lower your overall car insurance costs.

What happens to my no claim bonus if I make a claim that was my fault?

If you're involved in an accident that was your fault, you will lose some if not all of your no claim bonus.

The other driver is entitled to claim against your insurance. This affects your no claim bonus and reflected in the price you pay when you take out insurance.

With the addition of No Claim Bonus Protection to your policy, it is likely 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 my no claim bonus on a company car?

If your company car is listed as being used for business and personal use your insurer may accept the transfer of your no claim bonus. At MORE THAN, whether you can transfer your no claim bonus from your company car is subject to eligibility.

What happens to my no claim bonus if I’ve been away from driving?

If you’ve had a break from driving for over two years you will lose your no claim bonus.

What is mirrored no claim bonus?

This allows your no claim bonus built up on one car you own to be used for another car you own. This is only possible if the second car doesn't already have no claim bonus and is subject to eligibility.

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