No Claims Discount

How home insurance no claims discount works

By Angela Logan Wednesday 4 April 2018

Building up a no claims discount will help you save money on your home insurance. Here's why, with tips on how to save.

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Home insurance: no claims discount

Most home insurance companies will offer you a discount on your quote if you have a no claims discount. Some will even accept no claims discounts that you’ve built up from another home insurance provider.

A no claims discount – also known as NCD – is when you don’t claim on your home insurance for the year. The more years you go without claiming, the larger your NCD becomes. It works just like a car insurance no claims discount, which many people are more familiar with.

The value of the discount varies by home insurance provider: some give a 25% discount after the first year of no claims, whereas others may only offer that level of discount after multiple years.

Keeping your no claims discount

The potential savings on offer through your no claims discount mean that it can often be cheaper for you to pay out of pocket for small issues, such as accidental damage or a minor theft, rather than making a claim.

That’s because a claim could wipe out your entire no claims discount – or knock off at least a year off your NCD. It may be the case that your increased premiums could cost you more than it would to settle the damage yourself.

To understand which claims affect your NCD, you should check the terms and conditions of your policy.

Can I switch insurers and keep my no claims discount?

Most home insurance providers will offer new customers a NCD based on their claims record with their previous insurer (or insurers). This means you can keep benefiting from your no claims discount, while shopping around for the best deal on your home insurance.

Does claiming on contents insurance affect a no claims discount on buildings insurance?

If you have buildings and contents insurance with the same insurance provider, in the majority of cases claiming on one policy will not affect the no claims discount on the other. That said, it is a good idea to check the small print before making a claim, just in case. As no claims discounts are in the policyholder's name, couples should also protect themselves by taking out their insurance in joint names

Protecting your no claims discount

Once you have a clean claims record lasting at least four years, some insurance companies will allow you to protect your no claims discount. Protecting the discount will incur a fee, but it means you will be able to make one or two small claims on your home insurance without endangering the discount you accumulated over the years.

The other way to protect your NCD, of course, is to avoid making a claim on your home insurance

The other way to protect your no claims discount, is of course to avoid making a claim on your home insurance. Steps that you can take to minimise the chances of making a claim include improving your home security by installing a burglar alarm and window locks, and insulating pipes and tanks so that they do not freeze in the winter.

Those living in flood risk areas should also look at investing in flood prevention products such as sandbags to reduce the likelihood of floodwater making it into their homes.


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