Guide to Car Insurance with No Claims Bonus in the UK

If you’re in the UK and have a No Claims Bonus (NCB), you’re in a good position to save money on your car insurance.

Here’s a simple guide to help you understand it, get the most out of it, and maybe even uncover some useful tips.

What is a No Claims Bonus (NCB)?

A No Claims Bonus (also known as a No Claims Discount) is a discount you earn on your car insurance for every claim-free year. Essentially, the longer you drive without making a claim, the bigger your discount. It’s a reward for being a low-risk driver.

• 1 year claim-free: You might get a 30-40% discount.
• 5+ years claim-free: Discounts could go up to 60-70% or more, depending on the insurer.

How Does It Work?

Each year you drive without making a claim, you earn a year of NCB. If you do make a claim, your bonus could be reduced or even lost entirely. The more years you go without making a claim, the higher your bonus and, therefore, the greater your discount on insurance premiums.

Key Things to Know About NCB:

1. The Discount Varies by Insurer:
   • Not all insurers offer the same NCB discounts. Some may offer a higher discount for a longer claim-free history, while others might cap the discount at a certain level.
2. NCB is Usually Valid for 2 Years:
   • If you change insurance companies, they usually recognize your NCB. However, if you don’t use your NCB for over 2 years, you may lose it and have to start over.
3. You Don’t Need to Be a New Driver:
   • Even if you’ve been driving for years, you can still start earning an NCB if you haven’t made any claims in the past year.
4. Making a Claim Can Impact Your NCB:
   • If you make a claim, you might lose part or all of your NCB. However, not all claims affect your NCB, especially if it wasn’t your fault or you were not responsible. Some insurers offer NCB protection for an extra fee, which can help you keep your bonus even if you do make a claim.
5. NCB Protection:
   • If you’ve built up a significant NCB, you can often protect it. This means that, if you make a claim, your NCB won’t be affected. It’s a good option if you’re worried about rising premiums after a minor claim. This does come at a cost, but it might be worth it if your NCB is high.

Tips & Tricks to Maximise Your NCB:

1. Keep Your NCB Safe:
   • If you’re switching insurance providers, always ask for your NCB proof (usually in the form of a certificate). It’s the key to securing your discount with the new insurer.
2. Check if You Qualify for NCB Protection:
   • If you’ve built up a strong NCB over several years, consider paying a bit more to protect it. It can save you a lot of money in the long run, as you won’t lose your bonus after an accident or minor claim.
3. Drive Safely:
   • The simplest and best way to keep your NCB is to drive safely and avoid accidents or claims. The fewer claims you make, the more you save in the future.
4. Compare Insurance Providers:
   • Not all insurers value NCB the same way. Some insurers may offer better discounts for a clean driving record. It’s always worth comparing quotes from multiple providers to see where you can get the best deal.
5. Consider a Higher Excess:
   • If you’re happy to cover a higher excess in the event of a claim, you might be able to reduce your premium even further. This can often lead to a better discount, especially if you have a good NCB.
6. Ask About “Named Driver” Policies:
   • If you’re adding someone else to your policy, like a partner or family member, make sure they don’t negatively affect your NCB. Some insurers may allow you to add a driver without impacting your bonus.
7. Don’t Cancel Your Insurance Mid-Term:
   • Cancelling your insurance before the policy ends can affect your NCB. Try to stick to the full term of your policy and avoid gaps in coverage, as these may cause problems when you go to renew or switch insurers.

Can You Lose Your No Claims Bonus?

Yes, if you make a claim, your NCB could be affected. However, the amount it’s affected by depends on the nature of the claim:

• At-Fault Claims: If the accident is your fault, your NCB may be reduced.
• Non-Fault Claims: If you’re not at fault and can prove it (e.g., through police reports or witness statements), your NCB might not be impacted.

Also, keep in mind that an accident that isn’t your fault might still cause your premium to rise due to the insurer’s risk assessment.

Can You Transfer Your No Claims Bonus?

Yes, you can usually transfer your NCB between different insurers, as long as it’s been earned in the past 2 years and you have the proof. If you’re switching insurers, make sure to ask for the proof when you cancel your policy.

Things to Keep in Mind:

• Claims Can Affect Your NCB: If you make a claim, you may lose your bonus.
• NCB Proof: Always ask for written proof when you change insurers.
• Protect Your NCB: Consider NCB protection, especially if you have a long, claim-free history.

Final Thought:

Your No Claims Bonus is one of the best ways to save money on car insurance in the UK. By driving carefully, avoiding claims, and making sure you protect your bonus when possible, you can ensure that your insurance premiums stay as low as possible. Always compare policies to find the best deal and keep your NCB safe!