No-claims discount explained
What is a no-claims discount?
A no-claims discount (NCD), sometimes called a no-claims bonus, is a reduction in your car insurance premium for each year you drive without making a claim. It is one of the most significant factors affecting your annual premium.
How NCD builds up
Each year you do not make a claim, you earn one year of NCD. The discount percentage varies by insurer but typically follows a scale such as: 1 year = 30%, 2 years = 40%, 3 years = 50%, 4 years = 60%, 5+ years = 65–75%. Figures vary by insurer.
What happens when you make a claim
Making a claim usually reduces your NCD by a set number of years — commonly by 2 years per fault claim (the exact step-back depends on your insurer). If you have protected NCD (see below), a set number of claims per year may not affect your NCD at all.
NCD protection
Some insurers offer NCD protection as an add-on, for an additional premium. This typically allows you to make a set number of fault claims in a year without your NCD being reduced. It does not protect your overall premium — even with NCD protection, your premium may rise at renewal after a claim because you are reassessed as a higher risk.
Is NCD protection worth it?
Use our no-claims discount value calculator to compare the cost of protection against the estimated saving in scenarios where you do and don't make a claim. Whether protection makes sense depends on your NCD level, the cost of the add-on, and how likely you consider a claim to be.
Frequently asked questions
Most insurers offer their maximum NCD after 5 or more years of claim-free driving, though some reach maximum discount at 4 years. Each insurer has its own scale.
Not necessarily. Most insurers step back the NCD by a set number of years per claim rather than removing it entirely. Two claims in a year often have a larger impact. Check your insurer's specific step-back rules.
Yes. NCD is portable. Your current insurer will provide a proof of no-claims document. Most UK insurers accept NCD earned with a previous insurer, though some have their own verification requirements.
It depends on the cost of the protection add-on compared to the estimated value of the NCD you would preserve. Our no-claims discount value calculator can help you compare the scenarios.
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Disclaimer
This is a simplified estimate based on the assumptions shown above. It isn't a quote, and a real insurer may arrive at a different figure. Use it as a starting point, then check the details with your insurer or adviser.