What is a No Claims Discount?
It's a discount for no claims - I know. But what does that mean?
You earn your No Claims Discount (NCD) or No Claims Bonus (NCB) over the insurance year by not making a claim on your policy that would mean your insurer having to make a payment for things like:
- Damage to your car or someone else's
- Damage to other property
- Injury to you or someone else
- Financial loss to someone
How much could I save?
The percentage you can earn is different from insurer to insurer but the discount you earn after the first year is often up to around 30%. You can build up your discount over the years, usually up to a maximum of 65%-75%.
How does it work?
If you don't claim during your year's insurance, your insurer will give you a discount on your renewal premium.
Other insurers will usually recognise the number of years’ discount you have built up but the percentage discount they give off your premium does vary.
As a no claims discount depends on you having driven for a year without claiming, you can't get this discount when you first start driving: you have to earn it first!
If you're insured with ingenie, you can start earning a discount for good driving after just 3 months and your no claims discount will be on top of the good driving discount.
How long can I keep building my no claims discount?
The longer you go without claiming on your insurance, the better the discount you can get - usually up to at least 5 years. As long as your proof of no claims is less than 2 years old you can normally transfer your no claims record to a new insurer if you want to change.
What happens if I have to make a claim?
If you do have to make a claim, your no claims discount will usually be affected if your insurer has to make a payment and can’t recover their outlay from a third party, like another driver’s insurer.
That's why if you’re involved in an accident, it's really important to establish whether it's your fault and, if someone else is to blame, to make sure you get all of the details you can.
If you make a claim under your policy, your no claims discount will normally be put back by 2 years – so if you had 4 years’ discount it would go back to 2 years.
Can I protect my no claims discount?
Once you have earned 4 years’ or more no claims discount you can normally pay an extra premium to protect it, which means that it wouldn’t go back if you made a single claim in a year and no more than 2 claims in a 3 year period.
Can I build up a no claims discount as a named driver?
A few insurers will let you build up a no claims discount as a named driver but generally it can only be used with that insurer, who may not always give you the best deal. So it's usually worth having your own policy rather than getting on your parents' so you can start to build up your own insurance track record.
Never forget that if you crash as a named driver on someone else's policy, you will affect their no claims discount. And that won't make you very popular!
If you move to a new insurer, you will need proof of your no claims discount.
Some insurers give you this automatically in your renewal letter or when you leave
but it's best to check.