What is a no claims discount on car insurance?
Key takeaways
If you go for at least 12 months without making a car insurance claim, your insurer will apply a no-claims bonus or discount to your premiums
The longer you go without claiming the more you save, and depending on the insurer you can build your discount for up to 15 years
If you change your car insurance policy provider you may be able to transfer your no-claims bonus to your new insurance company
What is a no-claims bonus?
A no-claims bonus (also known as a no-claims discount) is a discount applied to your car insurance premiums that you earn when you go for at least a year without making a claim.
This discount accrues each year, so the longer you go without making a car insurance claim the more your insurer will discount from your premiums.
How does a no-claims bonus work?
A no-claims bonus (NCB) is a percentage off the full price of a car insurance policy. For example, if a policy normally costing £1,000 is eligible for a NCB of 20%, it would cost £800.
Your discount builds up over time. The longer you go without making a claim, the more your reduction will be. For example, you may get 5% off after one year of no claims and then a 10% reduction for two years of no claims.
How much discount do I get with a no-claims bonus?
No-claims bonuses or discounts can give you as much as 30% for one claim-free year and 60% for five claim-free years, according to the ABI.
Some insurers list the average no-claims bonus discount given to their motor insurance customers on their website.
For example, Admiral customers had an average no-claims discount of 16% in 2025, regardless of whether they had a year or eight years’ claim-free. If they had nine years claim-free, however, they had am 18% discount.
💡Top tip: Insurers often cap the no-claims bonus at around nine years.
How do I build up a no-claims discount?
You build up a no-claims discount simply by not claiming on your car insurance policy. This involves being a careful and diligent motorist to lower your risk of theft or being involved in an accident.
💡Top tip: If your car has minor damage that you caused you may want to cover the repair cost yourself rather than claiming on your car insurance in order to protect your no-claims discount. However, you still need to inform your insurance provider.
How do I get proof of my no-claims bonus?
There are a few ways to get proof of your no-claims bonus:
Your car insurance renewal letter
Your car insurance cancellation letter
A letter from your provider confirming your no-claims discount
To be valid, the letter must be dated within two years of starting your new car insurance policy.
Your insurer will also likely want to see the proof within a certain timeframe of your policy starting – this could be anywhere from 7 to 28 days, so ensure you have it ready as soon as possible.
In most cases, you’ll just need to send the proof of your no-claims discount via post – but check with your new insurer to be sure.
How long will my no-claims discounts last?
If you stop driving and cancel your car insurance policy your no-claims discount usually remains valid for two years.
How much can I save with a no-claims discount?
Insurers set their own rules when it comes to the minimum and maximum discounts given but they usually range from between 5% and 60%.
According to car insurance quote data from MoneySuperMarket, drivers with a one year discount paid on average £921.05
Years of no-claims discount | Comprehensive car insurance average cost |
|---|---|
0 | £1130.12 |
1 | £921.05 |
2 | £776.68 |
3 | £678.03 |
4 | £641.63 |
5 | £574.32 |
10 | £408.54 |
15 | £393.73 |
20 | £346.68 |
💡 Top tip: To find out how much you could potentially save you can contact an insurer and check what limits it sets or calculate your no-claims discount with our free tool.
Can I transfer my no-claims bonus to a new policy or provider?
Yes, you can usually transfer your no-claims bonus if you move to a new insurer (or if you buy a new car).
This is to your benefit as the cheapest way to buy car insurance is normally to shop around and switch insurers at renewal time.
Can I claim on car insurance without affecting my no-claims discount?
Yes, you can claim on your car insurance without affecting your no-claims discount in certain situations, such as:
If you can prove you weren’t at fault in an accident, as your insurer will recover the costs from the other driver’s insurer - or even if they’re uninsured
If the claim was for a crack in your windscreen or something else minor
Can I build up a no-claims bonus on a company car?
Yes, you might be able to build up a no-claims bonus on a company car if you’re the only one who uses it and you don’t make any claims. Ask your fleet manager to provide proof of your claims history.
Can I use my no-claims bonus for multiple cars?
No, you usually can’t use a no-claims bonus on multiple cars. This is the case even if you have a multi-car policy. Each car on the policy has its own bonus and these can’t be transferred to other vehicles on the policy.
Can I transfer my no-claims bonus from overseas?
Yes, you may be able to transfer a no-claims bonus if you’re moving to the UK from another country but it depends on where you were previously living and the insurer. To transfer the discount, you may need to show proof of it from your previous insurer, usually written in English on official company-headed paper.
If I’m a named driver can I build a no-claims bonus?
No, if you are a named driver of a car, not the main driver, you usually won’t be able to build up a no-claims discount. However, if you then go on to take out your own policy with the same insurer, you may benefit from a discount.
How do I protect my no-claims bonus?
You can protect your no-claims bonus by paying a small ‘protection’ fee to your provider, so if you need to make a claim you won’t lose your discount, or at least all of it.
It varies between insurers, but usually this protection should cover a maximum number of claims in a specific time frame. For example, you may be able to make two claims within three years without losing all your discount.
Is it worth protecting my no-claims discount?
Whether no-claims discount protection is worth the extra cost depends on your budget, how much your insurance is, and how big your discount is.
If you have a 50% discount and your insurance is usually £1,000, for example, this could bring the price down to £500. Paying £50 for protection in this instance would make sense as you’re still saving money overall. But it’s a gamble, as you may not end up making a claim anyway.
It’s also worth remembering your claims history is only one factor taken into account when calculating car insurance premiums.
For example, if you are convicted of speeding or moving to a high-risk area, your car insurance premium may rise even though you have a discount.
Do I lose my no-claims bonus if I don’t have a car?
No, you don’t automatically lose your no-claims bonus if you don’t have a car for a while or it’s declared SORN and you don’t need any insurance.
Your no-claims bonus will stay intact for two years for most insurers. If you’re uninsured for longer than this, it’s likely your bonus will reset.
Does a no-claims bonus apply to all motor vehicles?
Yes, it’s not just cars where insurers let you build up a no-claims bonus, you can do it with other vehicles including motorbikes.
While you usually can’t transfer a bonus from a car to a bike, it’s always worth checking with an insurer to see if this might be possible.
How can I get cheaper car insurance?
It is always worth checking your car insurance is the best policy for you and your vehicle and that you’re not paying too much for it.
Comparing car insurance quotes with MoneySuperMarket is a quick and easy way to find affordable cover.
Just tell us about yourself, your driving history, and the car you want to insure, and we’ll search the market for quotes that match your requirements.
You’ll be able to compare policies by the overall cost of cover, the type of policy, and the excess you’d need to pay to make a claim. Once you’ve found the deal you want, just click through to the provider to finalise your purchase.
Author
Mehdi Punjwani
Insurance specialist
Mehdi is a financial writer and editor with over six years of experience in personal finance. He has written for organisations and publications including Equifax, The AA, and USAToday, covering a...
Reviewer
Sarah Tooze
Car & Van Insurance Expert
Sarah Tooze has been a motoring journalist for more than 15 years, specialising in company cars and vans, and has won a number of awards during her career, including the Newspress ‘Automotive...
