A no-claims discount, often called a no-claims bonus, is a reduction an insurer may give after one or more policy years without a claim that affects the discount. The rules and maximum recognised years vary.
How no-claims history is built
If you change insurer, the new company may ask for evidence of your no-claims history. A renewal notice, cancellation letter or confirmation from the previous insurance provider is commonly used, but the exact evidence required varies.
What happens after a claim
an claim does not always wipe out every year you have earned. Insurers use their own step-back rules.
- One claim might reduce the number of recognised years, while several claims may reduce it further.
- Some types of claim might be treated differently, so check the policy rather than assuming.
- If another party is clearly responsible and your insurance provider recovers its costs in full, your no-claims discount may ultimately be restored.
- That may take time while responsibility and recovery are being settled.
What a no-claims discount actually does
It can make a large difference to the premium, but there is no standard percentage used by every insurer. That is why it is better to compare the final premium than to compare the advertised percentage discount on its own.
Protected no-claims discount
Protection usually means that a limited number of claims will not reduce the recorded number of no-claims years. It does not freeze the price of the policy.
- Your premium may still rise after a claim because the insurance provider might change the underlying price before applying the protected discount.
- When comparing protection, look at its cost and the number of claims allowed within the insurer's stated period.
- The wording varies considerably.
Using no-claims history on more than one car
In most cases you cannot simply use the same no-claims discount twice at the same time. If you buy a second car, ask insurers whether they will offer an introductory or mirrored discount.
- A multi-car insurance provider may also have its own arrangement.
- If a couple each has their own no-claims history, keep the records separate.
- Do not assume one partner's discount automatically transfers to the other.
Keep evidence when you change insurer
Save your renewal documents and any letter confirming your no-claims history. If there is a disagreement over the number of years, dealing with it is much easier when you can show a clear record.
Useful official information
For rules, complaints or database checks, these official sources are useful:
- No-claims discount is significant, but it is only one part of the price.
- Your car, address, mileage, occupation, driving history and chosen cover may all affect the price, so compare the complete quote rather than protecting a discount at any cost.
- For rules, complaints or database checks, these official sources are useful:
Using no-claims discount on more than one car
A no-claims discount is normally attached to one policy at a time. It cannot usually be duplicated across several policies, although some insurers offer an introductory or mirrored discount on an additional car.
Transfers between partners
Some insurers will recognise a spouse or partner's driving history or allow a no-claims discount to be transferred in limited circumstances, but this is not an automatic right. Ask the new insurer what proof it will accept.
Proof of no-claims history
Renewal notices, cancellation documents or a letter from the previous insurer are commonly used as proof. The receiving insurer may set a time limit on how old that evidence can be.
Claims, speeding and cancellation
A claim can reduce an unprotected no-claims discount, while a speeding fine does not normally erase it by itself. Cancelling part-way through a policy usually means you do not earn the additional year that would have been awarded at the end of a claim-free term.
Going abroad and annual price increases
Moving or spending time abroad can affect whether a UK insurer will continue to recognise the discount. Even with a growing no-claims record, the total premium can still rise because the discount is applied to a price that changes for many other reasons.
- GOV.UK: what to do after a road accident
