All you need to know about no claims discount

How does the no claims discount work on car insurance?

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No claims discount can make a massive difference to the cost of your car insurance - here’s all you need to know to make the most of it.

For every year you drive and make no claims on your insurance, you’ll get one year’s no claims discount. These add up – make no claims for five years, and your discount will increase.

The size of the discount, sometimes called a bonus, depends on how different companies calculate it.

Even if you have an accident, if you don’t make a claim, you’ll get a year’s discount – but you must still report it to your insurer.

Most insurers won’t accept proof of no claims discount that is over two years old.

So if you don’t have your own policy for a couple of years - or even if you have a company car insurance policy - you’ll have to start again from scratch.

If you make a claim, you should only lose two years of no claims discount and not the whole lot.

Changing your car should not affect the number of years’ no claims discount you have. Changing insurer shouldn’t impact no claims discount either – though some won’t recognise the full amount you have built up.

For example, if you’ve not claimed for ten years, then move to an insurer that only recognises a maximum of five years, the proof of no claims discount you get at your next renewal will only show five years. So watch out for this when you are switching each year.

Now you know what’s what, you can really make your no claims discount work for you…

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