Understanding Insurance

Your guide to No-Claims Bonus

No-Claims Bonus (NCB) or No-Claims Discount are phrases that often get used in relation to car insurance premiums. But, what is a No-Claims Bonus, how does it work and how can it help to reduce your car insurance premium? Why is insurance more expensive for elderly drivers?

What is a No-Claims Bonus?

No-Claims Bonus is a discount you get for not making a claim on your insurance policy. So, each year you do not make a claim on your policy, you get a year of No-Claims Bonus. This bonus will give you a discounted/reduced rate on future insurance policies. It does not matter if your previous years of NCB are on a different car: for every year of not claiming, the discount increases. However, there is often some maximum period insurance providers will consider for your NCB but this will vary between providers. 

Do I lose my No-Claims Bonus if I make a claim? 

This will depend upon the individual terms of your insurance provider and whether the reason you needed to make a claim was your fault or not. If it was not your fault, then your insurance provider might be able to reclaim the pay-out from the guilty party’s insurance provider, leaving your NCB unaffected. However, if the person responsible cannot be agreed, the accident might still affect your NCB, even if you believe it wasn’t your fault. 

Often, if you make a claim that is paid out then you would lose some or all your NCB. For exampleif it’s your first claim you might lose two years of your No-Claims Bonus but if it’s your second then you could lose your bonus altogether. This would then affect your discount on future insurance premiums. 

Can my No-Claims Bonus expire? 

Yes, if you are uninsured and so not driving for a period of time, your NCB can expire. This is often around 2 years but will vary between different insurance providers so make sure you double check. This might be worth considering when choosing which insurance provider is right for you. 

How do I prove my No-Claims Bonus? 

To get proof of your NCB, you can get in touch with your previous insurance provider. They will have access to your records and can provide evidence of this for you. 

If you’d like to know more about car insurance, we’ve written a handy guide to car insurance to explain it all. 

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