A 'no claims bonus' is a percentage discount on your annual car insurance premium. The percentage amount discounted from your premium depends on how many years you've gone without making a claim on your car insurance.      

For example, if your base premium is £1,500 and you have a no claims bonus of 40 percent, you would pay £900 for your car insurance.

Each year that passes without you making a claim, the discount increases.


1 year without a claim = 30% discount

2 years without a claim = 35% discount

3 years without a claim = 40% discount

4 years without a claim = 50% discount

And so on, to a maximum number of years, which varies between insurers. The number of years it takes to reach the maximum discount (usually 70 to 80 per cent) also varies.


What happens if I need to make a claim?

If you make a claim, your car insurer may 'step back' your discount, meaning your discount will be reduced - so you'll pay more for your car insurance.    


Is my no claims bonus worth maintaining?

If you can, it's good to maintain your no claims bonus. However, how much that bonus is worth depends on how much your premium is in the first instance.

For example, insurer A may give you a 40% discount for two years no claims, while insurer B may give you a smaller 30% bonus for two years no claims. But if insurer A charges you a £1,500 base premium and insurer B charges a £1,000 base premium, insurer B is cheaper, despite offering a bigger discount.


What about no claims bonus protection?

No claims bonus protection will protect your discount in the event of a claim. However, you should be aware that your insurer can still increase the base premium after a claim, which may well render the bonus protection obsolete. Example: after making a claim you still get your expected discount of 60%, but the base premium has increased from £1,000 to £1,500, so while the old premium was £400, the new premium is £600.

No claims bonus protection costs around £60 a year. The bigger your bonus, the more logical it is to take out no claims bonus protection.


Do all claims affect my no claims bonus?

No. If your insurer can recover the costs from the other party's insurer - because they were "at fault" - you won’t lose your bonus. Additionally, glass damage claims do not normally impact no claims bonuses.


Can I keep by no claims bonus if I change insurance provider?

Yes, you will be able to keep your no claims bonus if you switch insurer. It will be detailed on letters from your previous insurer. Providers also have access to special databases with this information, so details of your bonus won’t be lost.