Insurance basics
What is a no claims bonus and how does it work?
A no claims bonus is a discount for each claim-free year. Learn how it builds, how a claim affects it, and what protecting it does and doesn't do.
A no claims bonus (NCB), also called a no claims discount, is a discount you earn for each year you go without making a claim. The more claim-free years you build, the larger the discount on your premium tends to be.
How your no claims bonus builds
Each full year you go without claiming adds one year to your no claims bonus. The maximum number of years an insurer recognises, and the discount for each year, varies between insurers. A higher NCB can mean a substantial discount.
How a claim affects it
A fault claim, or a claim where your insurer cannot recover its costs from someone else, usually reduces your NCB rather than wiping it out completely. How many years you lose depends on the insurer's scale.
Key points:
- NCB is personal to you, not the car
- You can usually transfer it to a new insurer with proof
- Protecting your NCB limits how much a claim reduces it
Protecting your no claims bonus
Many insurers let you pay extra to protect your NCB once you have built up a certain number of years. Protection limits how much your NCB drops after a claim, but it does not freeze your premium. The underlying price can still rise after a claim.
No claims for vans and taxis
No claims discounts work in a similar way on van and taxi policies, although some insurers treat a van or taxi NCB differently from a car one. See our van insurance and taxi insurance pages if you drive for work.
About Kompare
Kompare doesn't currently offer quotes for car insurance. This guide is kept as general information.