Driving advice
What is a no claims discount?
How does no claims discount work?
Ryan Barham
Last updated: 29/05/2025
Ryan Barham
Last updated: 29/05/2025
We all know car insurance can be an expensive business, but one way of potentially reducing your annual premium is to take advantage of a no claims discount (NCD). In addition to potentially saving you money, an NCD also encourages safer driving.
This reduction is a reward for not making any claims and is offered by most insurers, even though there is no legal requirement to do so. A no claims discount tends to build up over time, so the longer you go without making a claim the higher your potential discount is.
Although a no claims bonus won’t protect you from general industry-wide price rises, it can help you save on your annual policy. The percentage varies from insurer to insurer but there is the potential to make quite significant savings e.g. 20% off a £1,000 premium would save you £200.
An NCD is unlikely to be applied to admin fees or other add-ons (these will be charged at the full rate) and the details may vary, depending on who your insurer is. Most no claims discounts will remain valid for two years after a policy ends and can often be transferred to a new car or different insurer.
If you make a claim, you’re likely to lose some or all of the NCD you’ve accrued over the years. If the other party was at fault for the car damage, the insurer should be able to claim back your repair costs without affecting your NCD but if you were involved in an accident with an uninsured driver, this may have an impact. Some companies offer an uninsured driver promise, especially in comprehensive policies. This guarantees you can keep your no claims discount if you are involved in an accident with someone who doesn’t have insurance.
No claims discount protection is an add-on feature that allows you to make a certain amount of claims over a length of time without having any impact on your NCD. It can help you keep some of your bonus and discount, even if you do make a claim.
If you don’t have this protection, you will lose your existing NCD or face a reduction depending on your level of discount, number of claims you’ve made or insurance provider’s policy.
The RAC recommends looking into no claims protection if you've driven for five years or longer without a bump or scrape, as a single accident could see you lose all the discount you have built up.
If you’re planning on selling your car, you can generally keep your no claims discount for up to two years. If you go over this length of time without insurance, it’s unlikely you’ll be able to keep any discount you have accrued. You’ll either face a reduction in the number of years discount or, more likely, have to start from scratch.
If you move over to a different insurance provider, you are likely to be able to keep your NCD but you may have to provide proof of this.
You can show proof of your no claims discount via an insurance newsletter or in your cancellation documents (if you’re switching providers). There should also be details on your insurance documentation and you can contact your insurance provider directly for further information.
You can find out more details about your no claims policy on your annual insurance documents. You may also be able to find this information by logging into their website or on their app. If you still can’t find out how many years you have, you can try contacting your insurance company directly.
Once you have found your details, it may be worth making a digital copy so you have it in an easier place to access in the future.
Named drivers can’t normally build up a no claims discount but some insurers may let them have one if they’re on the policy. This can be transferred if they take out a policy with the same provider but they will lose it if you move to a different insurer.
Temporary car insurance does not normally affect your no claims discount. At Tempcover, this is because our temporary car insurance policies are completely separate from your annual policy and that of the owner of a car might be borrowing.
Tempcover policies are also fully comprehensive, giving you extra peace of mind when somebody else takes your car out for a drive.
https://www.uswitch.com/car-insurance/no-claims-bonus/
https://www.confused.com/car-insurance/guides/no-claims-bonus-explained
If you have an accident which was your fault, you’re likely to lose at least two years of your no claims discount. If you have no claims discount protection, you may be able to make a claim without losing any of your bonus, but this will depend on your insurer’s policy.
Having a no claims discount can save you money in the long run. The more years that go by without you making a claim, the bigger the discount you will get on your annual policy. The discount will depend on your insurance policy.
If your car is hit while it’s parked and the accident was not your fault, your no claims discount shouldn’t be affected as the other driver’s insurance should cover the damage. If the other driver is uninsured or drives off without anyone catching their details, your NCD may be affected unless you have protection in place. It’s best to contact your insurer to confirm what happens in this situation.
Related tags:
Temporary Car InsuranceDriving AdviceNo Claims Discount