What is a no claim discount?

Published 8 May 2026

To put it simply, a no claim discount (NCD), also known as a no claims bonus, is when your insurer reduces the cost of your car insurance premium because you haven't made any motoring claims.

Your discount will start when you've had one year with no claims, and it'll build up with every year you've been driving without making a claim. So, the more years you have claim-free, the more discount you'll get on your car insurance.

After just one year without making a claim, you'll see a discount in the cost of your car insurance for the following year. And, as the years of no claims rack up, so will the amount of discount you receive.

No claims discounts vary between insurance companies, but they can be around 30% after one claim-free year and up to 60% or more after five years. The exact percentage depends on your insurer and your risk profile.

Here's a rough guide to typical NCD savings:

If you take a break from driving, you might cancel your insurance for a while. But as long as you reinstate your car insurance within two years, your no claims discount will seamlessly resume, so you can carry on building it up.

After two years without an active policy, your NCD typically expires and you'll need to start building it from scratch again. So, if you're planning to get back on the road, it's worth keeping an eye on the date when your last policy year ended – check your renewal notice or contact your insurer if you're unsure.

Yes, your no claims discount belongs to you, not the car, so you can transfer it when you switch insurers or get a new vehicle. You'll just need to provide proof, such as a cancellation letter or your renewal documents from your previous insurer.

Your new insurer may verify your claims history directly with your previous insurer, or they might ask you to send proof yourself. This should show your discount level, be in your name, and be less than two years old.

One thing to note – you can't use your NCD on two cars at the same time. It can only apply to one vehicle at a time, so each will need its own discount built up separately.

No. If you make a claim for an incident which wasn't your fault and we can recover the costs for any repairs or replacement from the liable motorist's insurer, your NCD won't be affected. This also applies if the driver at fault was uninsured, as long as you're able to give us details of the uninsured vehicle.

You'll also keep your NCD for any windscreen damage, breakdown call outs or motor legal expenses.

Typically, if a named driver is involved in a non-fault incident and we can recover costs from the at-fault party, the main policyholder's NCD won't be impacted either. You may still need to pay your excess upfront when making a claim, but if you're not at fault and we recover costs in full, we'll claim this back for you.

Most insurers cap your no claims bonus at around nine years, though some may set their maximum higher or lower. The good news is that even if you do make a fault claim, you won't lose your entire discount.

If you make a claim and the accident was your fault, you'll lose some of your discount rather than all of it. For example, if you have six years of no claim discount and you make a claim for an incident that was your fault, we'll apply a discount equivalent to three years of no claims at renewal.

The exact reduction depends on your insurer and how many years of claim bonus you've built up. Some insurers might drop you back by a few years, whilst others have different scales. So, the safer you drive, the less you pay… win win, right?

When you're switching insurers or taking out a new policy, you'll need to show proof of your no claims discount. The good news is, it's usually straightforward.

The easiest way to get proof is to check your renewal notice or cancellation documents from your current or previous insurer. Your NCD should be listed clearly in these documents, showing how many years you've built up.

If you can't find it, just contact your insurer directly and ask them to send you a letter confirming your discount. Some insurers can also verify your NCD records electronically through the Motor Insurance Bureau database, which makes switching even simpler.

Remember, your proof needs to be dated within two years of starting your new policy, so make sure it's current.

Typically, only the main driver (the policyholder) builds up a no claims discount. If you're a named driver on someone else's policy, you won't earn your own NCD, even if you're the one driving most of the time.

That said, a small number of insurers do offer introductory NCD schemes or named driver experience programmes. These allow named drivers to build up some form of discount that they can use when they take out their own policy later on.

If you're a named driver hoping to build your own discount, it's worth checking with your insurer to see what options they offer.