What Is A No-Claims Bonus And How Does It Work?
A no-claims bonus (NCB) is a discount on your car insurance premium that builds for every consecutive year you drive without making a claim. After five claim-free years, most insurers offer a discount of 50–60%.
Your NCB is one of the biggest factors in what you pay for car insurance. It belongs to you, not the car, and you can transfer it when you switch insurers or change vehicles.
This guide covers how the discount builds, what happens after a claim, how protection works, and how to keep your NCB intact when life changes.
Your no-claims bonus can cut your premium by up to 60% after five claim-free years. Protecting it is cheap, but protection does not stop your overall premium rising after a claim.
Get a car insurance quote to see how much your no-claims bonus is saving you.
- How does a no-claims bonus work?
- What does no-claims bonus protection actually cover?
- What happens to your NCB after a claim?
- Can you transfer your NCB to a new insurer or car?
- Do named drivers earn their own NCB?
- Does your NCB expire if you stop driving?
- How does your NCB affect your car insurance quote?
- Frequently asked questions (FAQs)
How does the discount build up?
You earn one year of NCB for every 12 consecutive months you hold a policy without making a claim. The discount grows automatically at each renewal.
What discount do you get each year?
| Claim-free years | Typical discount range | Cumulative saving |
| 1 year | 20-30% | Moderate |
| 2 years | 30-40% | Growing |
| 3 years | 40-50% | Substantial |
| 4 years | 45-55% | Large |
| 5+ years | 50-65% | Maximum for most insurers |
| 9+ years | 60-75% | Maximum (some insurers) |
Do all insurers offer the same discount?
No, each insurer sets their own discount scale according to ABI guidelines. Five years of NCB might be worth 55% with one insurer and 70% with another, which is why comparing quotes at renewal matters.
What happens to your NCB when you claim?
Making an at-fault claim typically reduces your NCB by two years under most insurers’ step-back policies. You do not lose the entire bonus, but the reduction can be costly.
How do different claim types affect it?
At-fault claims step your bonus back by two years. If you had five years, you drop to three at your next renewal.
Non-fault claims usually leave your NCB unaffected if the other driver’s insurer pays the full cost. Windscreen-only claims are typically excluded from NCB calculations.
How long does it take to rebuild?
You rebuild at the same rate: one year of bonus for each consecutive claim-free year from the point of reduction. A two-year step-back takes two claim-free years to recover.
What is no claims bonus protection?
NCB protection is an optional add-on that allows you to make a limited number of claims without losing your accumulated bonus years. Most insurers offer it for an additional premium.
What does protection actually cover?
A typical policy allows one at-fault claim per year, or two over a three-year period, before your NCB is affected. The exact terms vary by insurer.
Is protection worth the cost?
It protects the discount percentage, not the premium itself. Even with NCB protection, your overall premium may still increase after a claim because the insurer reassesses your risk.
Our excess guide explains how claims costs interact with your policy.
Can you transfer your NCB to a new insurer?
Yes, your no claims bonus belongs to you, not your insurer. You can take it with you when you switch providers, and your new insurer will ask for proof.
What proof do you need?
Your previous insurer provides a renewal letter or claims history confirming your NCB years. Most new insurers accept this as proof, though some may contact your old insurer directly.
Does your NCB expire?
Most insurers recognise your NCB for around two years after your last policy ends. If you take a break from driving longer than that, you typically need to start building again from zero.
Young drivers building their first NCB should be especially careful about gaps in cover, as losing even one or two years of bonus has a proportionally larger impact on their premiums.
Can a named driver build their own NCB?
On most standard policies, only the main policyholder earns NCB. A named driver does not build their own bonus, even after years of claim-free driving on someone else’s policy.
Are there any exceptions?
A few insurers offer named driver NCB schemes, but they are uncommon. If building NCB is important, taking out your own policy as the main driver is the most reliable route.
Does a named driver’s claim affect the policyholder’s NCB?
Yes, if a named driver has an accident and a claim is made on your policy, it reduces your NCB. The claim is recorded against the policy regardless of who was driving.
How can you maximise your no claims bonus?
Avoid claiming for minor damage where the repair cost is close to your excess. The long-term premium increase from losing NCB years often outweighs the claim payout.
What strategies protect your bonus?
Compare quotes at every renewal to find the insurer that values your NCB most. Our tips to lower your premium cover the full range of strategies available.
Choosing fully comp cover with a higher voluntary excess can reduce your premium without risking your NCB on small claims.
Should you always avoid claiming?
Not for serious incidents, because under the Consumer Insurance (Disclosure and Representations) Act 2012 you must report all incidents to your insurer even if you choose not to claim.
Failing to report can invalidate your policy.
Check vehicle insurance requirements to understand your legal obligations as a policyholder.
Frequently Asked Questions (FAQs)
Some insurers accept NCB earned on a motorbike policy, but it is not universal. Check with your car insurer before assuming the discount will carry over. You will need proof from your bike insurer.
Request a confirmation letter from your current or most recent insurer. Most send it automatically at renewal or cancellation. If you need it urgently, call them directly.
It depends on how many years of NCB you have and what your premium is. If your discount saves you several hundred pounds a year, paying £20–£60 to protect it is reasonable. For a policy with only one year of NCB, the cost is harder to justify.
No. Most insurers exclude windscreen and glass claims from the NCB step-back scale. Check your policy wording to confirm, as some smaller insurers may treat it differently.
The Claims and Underwriting Exchange (CUE) is a central database that records motor insurance claims. Insurers check it when you apply for cover. Claims stay on CUE for six years, regardless of fault.
No. Your NCB applies to one policy at a time. If you insure a second car, you start with zero NCB on that vehicle unless the insurer offers a multi-car introductory discount.
Most insurers accept NCB proof for up to two years after your last policy expired. After that, you may need to start building from scratch. Some insurers have shorter retention periods of 12 months.
Usually not, as long as your insurer recovers the full cost from the other driver’s insurer. If they cannot recover the money, it may be treated as a fault claim and reduce your bonus.
Most insurers require at least two or three claim-free years before you can add NCD protection. You cannot protect an NCB you have not yet built.
No. Fines and penalty points are separate from your claims record. They do not reduce your NCB, but they can increase your base premium at renewal because they affect your risk profile.