What is a No Claims Discount?

A No Claims Discount (NCD), sometimes called a No Claims Bonus (NCB), is one of the easiest ways to reduce the cost of your car insurance.

The longer you drive without making a claim, the bigger your potential discount can become. Here’s everything you need to know about how it works.

If you’d like more advice before doing anything with your vehicle, visit our valuation guidance hub for expert guidance on valuations, preparing your car and securing the best possible price.

What is a No Claims Discount?

A No Claims Discount rewards drivers who don’t make claims on their car insurance.

Typically, for every year you complete without making a claim, you’ll earn another year of No Claims Discount. Insurers then use this when calculating your renewal premium.

For example, if you’ve driven for five years without making a claim, you may have five years’ No Claims Discount, which could reduce the cost of your insurance compared with someone who has no claims history.

Each insurer has its own discount scale, so the percentage saving can vary between providers.

Can named drivers build up a No Claims Discount?

In most cases, no.

A No Claims Discount is normally earned by the main policyholder, not named drivers.

However, some insurers operate schemes that allow named drivers to earn their own discount, so it’s worth checking your insurer’s terms and conditions.

If you’re the policyholder and decide to switch insurers or buy another car, you can usually transfer your existing No Claims Discount to your new policy, provided you meet the insurer’s eligibility requirements.

What happens if you make a claim?

Making a claim doesn’t automatically mean you’ll lose your entire No Claims Discount.

What happens depends on the circumstances.

If the accident wasn’t your fault

If your insurer successfully recovers all costs from the at-fault driver’s insurer, your No Claims Discount will often remain unaffected.

If you were at fault

If you’re responsible for the accident, or your insurer can’t recover its costs, your No Claims Discount may be reduced.

The amount lost depends on your insurer’s policy and how many years’ discount you’ve built up.

Theft or vandalism

Claims involving theft or malicious damage may also affect your No Claims Discount if your insurer cannot recover the costs.

If you’re unsure how a claim might affect your policy, it’s always best to speak to your insurer before making assumptions.

Can you protect your No Claims Discount?

Yes.

Many insurers offer protected No Claims Discount as an optional extra for an additional premium.

This means that if you make a limited number of claims within a specified period, you may keep your accumulated No Claims Discount.

However, it’s important to understand that protecting your No Claims Discount doesn’t guarantee your insurance premium won’t increase.

Your insurer still considers other risk factors, including:

• Your claims history.
• The type of claim.
• Your vehicle.
• Where you live.
• General insurance market conditions.

Protected No Claims Discount simply protects the discount itself—it doesn’t freeze the price of your insurance.

Is protecting your No Claims Discount worth it?

Whether it’s worthwhile depends on your circumstances.

You may wish to consider:

• How many years’ No Claims Discount you’ve built up.
• The additional cost of protecting it.
• How likely you think you are to make a claim.

For drivers with several years of accumulated discount, paying a little extra for protection can provide valuable peace of mind.

Compare insurance carefully

When comparing insurance quotes, don’t just look at the premium.

Also compare:

• Excess levels.
• What’s included as standard.
• Whether No Claims Discount protection is available.
• Customer service and claims handling.

Understanding the full policy can help you avoid surprises if you ever need to make a claim.

If you’re wondering whether making a claim is actually worthwhile, our guide on when to make an insurance claim and when not to explains the factors you should consider before contacting your insurer.

You may also find it useful to read our guide on OEM parts vs aftermarket parts, as some insurers specify which replacement parts may be used following a claim.

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