No claims bonuses explained

We all want cheaper car insurance. And one of the best ways to lower your premium is by building up a no claims bonus. 

But what is a no claims bonus? And how exactly does it work? We’ve put together this handy guide to answer these questions and more.

What’s a no claims bonus?

A no claims bonus – also known as a no claims discount, NCB or NCD, – is a discount car insurance providers give you as a reward for safer driving. 

Every year you drive without making a claim, your no claims bonus increases. For instance, if you drive for six years without making a claim, you’ll usually have six years’ no claims bonus.

The more years’ no claims bonus you have (up to a certain number of years), the cheaper your premium should be when you come to buy or renew your car insurance.

Can I earn a no claims bonus as a driver on someone else’s policy?

To earn a no claims bonus, you’ll usually need to be the main driver on your own car insurance policy – not just a named or additional driver on someone else’s.

If you’re interested in taking out your own policy, it’s worth visiting a price comparison website. These include Compare the Market, Confused.com or Go.Compare. 

What happens to my no claims bonus if I make a claim?

It varies from insurer to insurer. But if you have to make a claim, it’s likely that you’ll lose some or all of the no claims bonus you’ve earned. 

Here at Prima, we’ll explain what should happen to your no claims bonus as soon as you call us to make a claim. 

In most cases, we’ll decrease it down to three years the first time you make a claim. For every claim you make after that, we’ll decrease it by a further two years. 

But you’ll be happy to know that you won’t lose your no claims bonus if:

• You only claim for glass damage
• You’re hit by an uninsured driver (so long as you get their details)

What’s no claims bonus protection?

Like we said, making a claim could mean you lose your no claims bonus. And this would have an impact on the price you pay when you come to renew your car insurance.

That’s why lots of insurance providers now give you the option to protect your no claims bonus when you take out a policy. It costs extra. But it means that your no claims bonus shouldn’t be affected if you’re forced to make a claim. 

No claims bonus protection allows you to make one or more claims before your number of no claims bonus years falls. For instance, if you buy NCB protection with Prima, you can make up to two claims during your policy period without it affecting your no claims bonus. 

It’s important to note that no claims bonus protection does not protect the overall price of your insurance policy though. The price of your insurance policy may increase following an accident, even if you weren’t at fault.

How this protection works varies from insurer to insurer. So make sure to read the terms carefully, especially the step back procedures provided by your insurance provider.

Do I keep my no claims bonus if I switch insurance providers?

Most insurance providers recognise any no claims bonus you’ve built with other insurance providers in the UK. But they might ask to see proof of them. 

Here at Prima, we ask to see a letter from your previous insurance provider – such as your renewal or cancellation letter – which clearly states how many years’ no claims bonus you’ve earned. 

If you don’t have a letter like this already, you can contact your previous insurance provider to request one.

Can my no claims bonus expire?

It’s not uncommon to take a break from driving. 

But if you’ve not held your own car insurance policy within the last two years, any no claims bonus that you’d built will have expired. 

At Prima, we’ll sometimes accept an expired no claims bonus if you can prove you’ve done some driving recently though. For instance, as an additional driver on someone else’s policy.

How much will my insurance cost?

Whether you’ve already built a substantial no claims bonus or you want to start building one, it’s good to shop around to find the best car insurance price. Try visiting a price comparison website, such as Compare the Market, Confused.com or Go.Compare.