Car Insurance No-Claims Bonus: How It Works and How to Protect It

A no-claims bonus (NCB), also called a no-claims discount, is a reduction in your car insurance premium for every year you don’t make a claim.

How NCB Works

Claim-Free Years	Typical Discount
1 year	30%
2 years	40%
3 years	50%
4-5 years	60-65%
6+ years	65-75% (max)

The discount applies to the insurance premium, not the base rate.

How NCB Is Lost

Event	Effect on NCB
At-fault claim	NCB resets to 0
Non-fault claim	Usually protected (depends on policy)
Not insured for 2 years	NCB expires
Named driver claim on your policy	NCB affected

Protected No-Claims Bonus

Feature	Protected NCB	Unprotected NCB
Cost	£20-40 extra per year	Base premium
First claim	NCB stays intact	NCB resets
Second claim	May reduce NCB	Already reset
Limits	Usually 1-2 claims protected	N/A

Protected NCB means you can make 1-2 claims without losing your accumulated discount.

Should You Protect Your NCB?

Situation	Protect?
5+ years NCB (60%+ discount)	Yes
2-4 years NCB	Consider it
0-1 year NCB	Not worth it
Low premium (under £300)	Probably not
High premium (£1,000+)	Yes

How NCB Transfers Between Insurers

Scenario	NCB Transfers
Switching insurers	Yes (need proof)
Adding a second car	Yes (on one car only)
Moving abroad	Usually not
Changing to a different vehicle	Yes
Selling car and not driving	Valid for 2 years

Proof of NCB

Method	Details
Renewal notice	Shows NCB years
NCB certificate	Request from current insurer
Ask new insurer	They request proof from old insurer

Keep your renewal documents as proof.

Named Drivers and NCB

Driver Type	Earns Own NCB?
Named driver	Some insurers now allow this
Policyholder	Yes, always
Additional driver on spouse’s policy	Depends on insurer

Some insurers now let named drivers build their own NCB, useful for young drivers.

Small Claims vs Paying Yourself

Claim Amount	NCB Loss Value	Decision
Under £500	May lose 50%+ discount	Pay yourself
£500-£1,000	Depends on NCB years	Check your discount value
Over £1,000	Claim if NCB protected	Claim

A small claim can cost you more in higher premiums than the claim itself.

Bottom Line

No-claims bonus can reduce your premium by up to 75%. Protect it after 4-5 years of claim-free driving. A small claim may cost more in lost NCB than paying for the repair yourself. Always provide NCB proof when switching insurers. NCB lasts 2 years if you’re not insured. Named drivers can now build their own NCB with many insurers.