What is a No Claims Discount?
A no claims discount, also known as a no claims bonus, is crucial in reducing your insurance premiums. A no claims discount is a way of judging risk for insurance companies, the more you have the safer you become to a firm, and the less you will have to pay in insurance.
Claim-Free Years
Generally speaking, a no claims discount is earned for every year that a driver has insurance on a car without having to make a claim. This does differ depending on the company's terms and conditions, some insurers will offer a no claims bonus early. For example, as an introductory offer they will provide you with a 1 years no claims discount after just 10 months.
In a bid to remain competitive some firms will even offer no-claims discounts to named-drivers who don't have their own policy.
Your no claims discount will increase year-on-year, the actual amount you will save will depend entirely on the insurance company. Some firms will heavily discount their insurance premiums whereas others apply less weighting and taking into account other factors such as age and car size.
No Claims Transfer & Protection
Unless stated, your no claims discount can be transferred if you wish to switch insurance companies. A large majority of car insurance companies will also allow you protect your no claims discount, this will increase your premiums slightly but can be a good idea if you have a accrued a number of years without claiming. Protection means that you won't lose all your no claims discount if you end up having to make a claim.
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This site is for information only and cannot offer insurance advice for your particular situation.
Consult with an FSA authorised insurance advisor if unsure on any topics related to car insurance.
