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No-Claims Bonus Explained
A no-claims bonus, or no-claims discount, increases for every year that you have car insurance but don’t make a claim.
Many insurance providers put a cap on no-claims discounts after around five years, but up until that point, you will save money for each year that you don’t claim on your car insurance policy.
Your car insurance premium will be reduced depending on the amount of no-claims bonus you’ve accrued, and it’s estimated that you could pay up to 30% less if you have one year of no claims. This figure could rise to as high as 60% after five years of no claims depending on the insurance company.
Where to find proof of your no-claims bonus
Contact your insurer directly
Will a new insurer ask for proof of no-claims?
When switching providers, your new insurance company will ask to see your proof of no-claims bonus so that it can be applied to your new car insurance policy. There are several things you’ll need to be aware of to make sure this process goes smoothly, and you don’t risk being left uninsured:
- A lot of insurance companies will not accept photocopies of your proof of no-claims bonus and will require you to send them an original copy so that they can verify that it’s real. Due to this, you should make a copy of it for your own records in case they don’t send back the original.
- Most insurers will also get in contact with your previous insurer so that they can confirm with them that the proof of no-claims bonus you’ve provided is fully accurate. So, make sure that the information you’ve given to your new insurer is correct.
- Many insurance companies set a time limit for you to provide them with your proof of no-claims bonus, and this is usually between 7-21 days. Make sure you ask your new provider what the time limit is so that you don’t miss the deadline, as this could increase your premiums.
Can you keep your no claims bonus if you don’t have a car?
Can I protect my no-claims discount?
With most car insurance providers, you will lose some or all of your no-claims discount if you’re involved in an accident that is your fault. You can also lose your bonus for accidents that are not your fault if you’re insurer is unable to recover their costs.
Due to this, many insurers will offer to protect your no-claims discount if you pay a small fee on top of your premiums. This means that certain claims will not lead to you losing your bonus. However, your premiums may still go up as they are calculated using your claims history.
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The Motor Insurance Bureau operates the online No-Claims Database, where insurers can access proof of driver’s no-claims bonuses. This makes it easier for both drivers and insurers but not all insurance companies are signed up for this service.
Most insurance companies don’t allow named drivers to build up no-claims bonuses as these are usually based on the claims history of the main driver. There are some insurers that will allow a named driver to accrue bonuses but usually only if the driver agrees to stay with the insurance provider.
Your no-claims bonus is transferrable to your new insurer as long as you provide them with adequate proof of the bonus. But, if you change insurers before your current 12-month policy has ended, then you won’t receive your no-claims bonus for that year.