A no-claims bonus (NCB) is one of the best ways to save on your car insurance. The longer no claims bonus you accrue, the more money you save.
What is a no claims bonus?
You can start accumulating NCB for every year you have car insurance without making a claim. A no-claims bonus is a discount given by insurers on your premiums, which increases the longer you go without making a claim. Insurers have been known to offer discounts of 60% or more for those with a long history of driving without making a claim.
How do I earn a no claims bonus?
Car, van, commercial vehicle, tractor, and all types of insurances like third-party, fully comprehensive, and third-party, fire, and theft will earn you NCB.
Depending on your insurer, you can earn an NCB for nine years. Although, most insurers will only allow you to earn for up to five consecutive years.
How much can I save from an NCB?
Insurers will reduce your premiums by a set percentage determined by the number of years you are driving claim-free. Discounts vary significantly from one insurer to another, but the average discount scale is usually:
- 1 year: 10%
- 2 years: 20%
- 3 years: 30%
- 4 years: 30%
- 5 years: 50%
- 6 years+: 55%
There are other ways to reduce the costs of your car insurance policy; you can read our guide, 10 Easy Ways to Reduce the Costs of Your Car Insurance, for more information.
How can I protect my no claims bonus?
Some insurance companies offer opportunities to preserve your bonus. A car insurer may be able to redeem all costs from another insurer where a claim is deemed not to be your fault. In this case, you wouldn’t lose any claims discount. It is best to talk to your chosen insurer about their policy as this can vary greatly.
In most cases, if you do not have a policy in your name for two years, your No Claims Bonus will disappear.
Can I use my NCB on another vehicle?
Yes, you can. In the insurance industry, they call it “Mirrored No Claims Discount,” it is used by a person who has earned a bonus on a car policy and decided to buy another vehicle. To get a discount on their insurance, that person can “mirror” their accumulated NCB to the vehicle they just bought.
Can named drivers earn a no claims discount?
With a standard car insurance policy, named drivers do not earn their own No Claims Discount. However, some companies will allow them to earn an NCB. This is brilliant if the named driver wants to go on with their own car insurance policy later.