No claims bonus explained

What is a no claims bonus?

A no claims bonus (NCB), or no claims discount, is a count of the number of years in which you haven’t made a claim on your car insurance policy.
Its worth varies from insurer to insurer, but a NCB of five years or more, for example, could give you a 60-75% discount on your premium.

How do I build my NCB?

For every year you’re insured without making a claim, you’ll earn another year's NCB. Some companies offer accelerated policies where you can earn a bonus in 10 months rather than 12.
You can build up an unlimited number of NCB, but most insurers will only use a maximum of five years when working out a discount.

If I make a claim, how is my NCB affected?

If you make a claim on your policy where your insurer pays out, you’ll generally lose some, or all, of your no-claims bonus.
But if you’re hit by another car and it’s agreed that you weren’t at fault, your insurer may be able to reclaim the payout from the other car’s insurer and your NCB may not be affected.
In cases where fault can’t be agreed on, insurers may split the cost of the claims and both drivers’ NCB could be affected. This includes if your car is stolen or damaged by bad weather.
If you pay for a new policy with a reduced NCB and are later found not at fault, you can usually get your NCB reinstated and a refund on the extra premium you paid.

Should I protect my NCB?

Protecting your NCB allows you to have two “at fault” accidents without affecting the bonus. So if you have an accident, the NCB remains intact even if your insurer can’t claim their costs back.
This won’t necessarily stop your premiums going up after a claim, as insurers use your claims history to calculate premiums, with your NCB discount calculated at the end.
Any remaining NCB you have after the claim may lower your new premium, but there’s no guarantee that it’ll be lower than the previous year.
While it usually costs an extra 5-10% of the total premium to protect your NCB, it can cost as much as £100 a year if you’ve had a recent fault claim.