No Claims Bonus (NCB) — sometimes called No Claims Discount — is one of the most effective ways for UK drivers to save on car insurance. If you’ve heard about it but aren’t sure how it works or how to make the most of it, this guide will walk you through everything you need to know.
What is a No Claims Bonus (NCB)?
A No Claims Bonus is a discount that your insurer gives you for each year you drive without making a claim on your car insurance policy. The longer you go without making a claim, the bigger your discount will typically be.
Example:
- 1 year without a claim: ~30% discount
- 2 years: ~40%
- 3 years: ~50%
- 4+ years: up to 60–70% with some insurers
It’s essentially a reward for safe and claim-free driving.
How Does NCB Work?
When you take out a car insurance policy, your NCB starts accumulating if you don’t make a claim during the policy year. Each subsequent year you remain claim-free, your discount grows. However, if you do make a claim, you may lose some or all of your NCB.
Important: The NCB is tied to the policyholder, not the vehicle. So even if you change cars, your NCB stays with you.
How to Protect Your No Claims Bonus
Many insurers offer No Claims Bonus Protection for an added premium. This means:
- You can make a limited number of claims (usually 1 or 2 in a 3–5 year period) without losing your full NCB.
- It does not mean your premium won’t increase after a claim — just that your NCB discount remains intact.
Types of Protection:
- Optional add-on: You pay extra to secure your bonus.
- Automatically included: Some insurers include it after a certain number of claim-free years.
Situations That May Affect Your NCB
Understanding how insurers handle different scenarios is vital:
1. Fault vs. Non-Fault Claims
- Fault Claim: You were responsible, or the insurer couldn’t recover costs — your NCB may be reduced.
- Non-Fault Claim: Another driver was at fault and their insurer pays out — your NCB may remain unaffected.
If the at-fault party is unidentified (e.g., hit-and-run), it may be treated as a fault claim.
2. Changing Insurers
- You can transfer your NCB when you switch insurers.
- You may need to provide proof of your NCB — usually a letter from your previous insurer.
3. Time Limits
- Most insurers allow you to keep your NCB for 2 years if you take a break from driving.
- After that, it may expire unless you resume insurance.
How to Maximize Your NCB and Savings
Drive Safely and Responsibly
Avoid accidents, speeding, and careless driving to minimize the risk of making a claim.
Choose a Higher Voluntary Excess
Opting for a higher excess may reduce your premium — making it less likely you’ll claim for minor damage.
Pay for Small Repairs Yourself
For minor issues (like scratched paint), it’s often cheaper in the long term to pay out-of-pocket and protect your NCB.
Protect Your NCB (if it’s worth it)
If you’ve built up 4+ years of NCB, consider paying for NCB protection. It could save you more in the long run.
Park Smart
Use garages or driveways if available. Some insurers offer discounts for secure parking, reducing the chance of theft or damage.
Shop Around at Renewal
Even with a strong NCB, your current insurer might not offer the best deal. Compare quotes to get maximum value.
Common Myths About No Claims Bonus
“NCB applies to both drivers on a joint policy”
No — only the main policyholder earns the NCB, not named drivers.
“All insurers calculate NCB the same way”
Each insurer sets its own NCB scale. One insurer may offer 60% after 5 years, another may offer 65%.
“Your premium won’t increase if your NCB is protected”
Even with protection, your base premium may rise after a claim.
Final Thoughts
The No Claims Bonus is a powerful tool for lowering your car insurance premiums in the UK. By understanding how it works, protecting it wisely, and driving safely, you can enjoy significant savings year after year.
Whether you’re a new driver or a seasoned motorist, staying claim-free isn’t just good for safety — it’s great for your wallet.
Leave a Reply