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.
The real cost of a small claim
The figures above hide the key decision motorists face when something goes wrong. Suppose you have built up five claim-free years and a 60% discount on a £700 premium. That discount is worth £420 a year, or roughly £1,260 over three years. Now imagine a £400 bumper scrape that you report to the insurer. The repair itself is modest, but your NCB resets to zero, your premium jumps, and over the next few years you repay far more through higher premiums than the £400 repair ever cost. For small, cheap incidents, paying out of pocket is often the financially sensible choice.
The reverse applies to expensive damage. A write-off or a large repair bill running to several thousand pounds is exactly what insurance exists for, and if your NCB is protected you can claim without losing the accumulated discount. The skill is knowing which bucket your incident falls into before you dial the claims line.
Rebuilding a lost bonus
If you do take a hit and your NCB resets, do not panic. Start from year one again: a single claim-free year rebuilds a 30% discount, and the maximum is only a few years away. Staying with one insurer can help you rebuild steadily, though it is still worth comparing at renewal. And because some insurers now let named drivers earn their own bonus, adding a young or new driver as a named driver on your policy can help them build an NCB history that will lower their own costs later.
How to protect your NCB in practice
The habits that build an NCB are simple but worth stating. Keep your renewal documents and request an NCB certificate every year, so you have proof handy when switching. Add protected NCB once your discount is large enough to be worth defending. And weigh every small claim against the value of your discount before deciding whether to involve the insurer — often the cheaper road is to repair the minor damage yourself.
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.