Car insurance no claims bonus: how much you really save

What is a car insurance no claims bonus?

A car insurance no claims bonus (sometimes called a no-claims discount) is a reward you earn for going 12 months or more without making an at-fault claim on your car insurance. It reduces your premium at renewal and increases each year you remain claim-free, often becoming one of the biggest long-term savings on your policy.

Most insurers offer increasing reductions for every claim-free year, and after five years, many drivers benefit from premium drops of 40%–60%, depending on the provider.

Looking to cut costs this year?
Start by comparing car insurance quotes with your current no claims bonus applied.

How much does a no claims bonus save UK drivers?

Savings vary by insurer, age, driving history and vehicle. But multiple pricing snapshots from UK comparison sites show typical no claims savings are significant:

• A driver with five years of no claims can save around £491 compared to someone with none
• Some insurers offer £400–£500 off premiums after five clean years
• One year of no claims commonly gives around 30% off
• After three years, many insurers offer discounts of 40% or more
• Maximum discounts typically apply after five to nine years depending on the insurer

For younger drivers, savings can be even higher because their base premiums are more expensive. A clean record makes a big difference.

What happens if you make a claim?

How insurers classify claims

Car insurers divide claims into two types:

• Non-fault claim:
  Another driver (or their insurer) pays all costs. You usually keep your no claims bonus.
• Fault claim:
  Your insurer pays out. This typically reduces or removes your discount, even if the accident wasn’t technically your fault (e.g., an animal runs into the road or the other driver is uninsured).

Why your premium may still rise

Even if you protect your no claims bonus:

• Insurers may still increase the base premium
• Claims remain on file for three to five years
• They adjust pricing to reflect higher perceived risk

This is why bonus protection helps, but does not freeze your premium.

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How much does losing your no claims bonus cost?

A single fault claim can be expensive long term. Drivers who lose their bonus might see premiums jump by:

• £200–£600 for average drivers
• £1,000+ for young drivers
• Much higher for high-performance vehicle owners

For example, pricing checks for a Vauxhall Corsa — one of the UK’s most insured vehicles — show:

• With five years no claims: premiums under £815
• With zero no claims: premiums can reach £1,400+

This highlights how valuable your discount becomes over time.

Want to see the difference your no claims bonus makes?
Compare car insurance with and without your NCB to check the price gap.

How long do car insurance claims stay on record?

Most insurers keep claims on your record for three to five years, depending on:

• Claim type
• Whether you were at fault
• Insurer’s internal rules

Even a small prang can affect premium pricing for several years.

What counts as a fault claim?

A fault claim isn’t about blame — it’s about who pays.

You may lose part or all of your bonus if:

• Your insurer pays out even partially
• The other driver cannot be identified
• The other driver is uninsured
• A vehicle or animal causes damage but no party can be charged
• Your insurer cannot recover their costs

Common fault claims include:

• Rear-end collisions
• Single-vehicle accidents
• Scrapes in car parks
• Windscreen or glass claims (depending on insurer)
• Damage caused by hitting animals
• Some weather-related incidents

How no claims bonus protection works

You can pay extra to protect your no claims bonus. This allows you to make a small number of claims without losing your discount.

Each insurer sets their own rules such as:

• Maximum claims allowed in a 3–5 year window
• Which claims count
• Whether protected claims still affect pricing

However, bonus protection does not stop premiums rising because:

• The claim still increases the insurer’s risk assessment
• Insurers adjust the base premium, not the discount percentage

Protection only preserves the discount from being reset to zero.

How much does no claims bonus protection cost?

In most cases:

• Typical cost: £50–£70 per year
• Higher for young drivers
• Often cheaper when added at the start rather than mid-policy

Many drivers consider it worthwhile after reaching three or more years of no claims, as the discount becomes more valuable.

How insurers calculate no claims discounts

Each insurer has its own discount scale. Factors include:

• How many years count toward the maximum
• Discounts given per year
• Whether a claim resets you to zero or drops you one tier
• Your age and experience
• Your postcode
• Vehicle group and characteristics
• Annual mileage
• Driving purpose (social, commuting, business)

Young drivers typically benefit the most from clean-year discounts because their base premiums start higher.

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Does telematics help build no claims quicker?

Telematics (also known as black box insurance) can lower premiums and help you build a claim-free record more safely. The device monitors:

• Speed
• Acceleration and braking
• Cornering
• Time of day you drive
• Mileage

Drivers with good scores often:

• Earn discounts faster
• Receive lower renewal quotes
• Avoid steep increases in year one

Telematics is especially beneficial for:

• Drivers under 25
• New drivers
• High-mileage commuters
• Those driving in higher-risk areas

If you’re building your no claims bonus,
comparing car insurance is one of the quickest ways to see how much you can save.

What is the average annual car insurance premium in the UK?

The ABI reports an average car insurance premium of £562 across the UK, though younger drivers often pay significantly more.

Premiums are influenced by:

• Age
• Driving history
• Vehicle type
• Claims record
• Location
• Annual mileage
• Whether you park on the road or driveway

Drivers under 25 commonly pay £1,500–£2,200, making a clean no claims history especially valuable for long-term savings.

What information do I need for an accurate car insurance quote?

To get realistic annual pricing, insurers need:

Driver details

• Age and occupation
• Licence type and years held
• Driving history
• Any named drivers
• Claims and conviction history

Vehicle details

• Make, model and year
• Engine size and fuel type
• Security features
• Where the car is kept overnight
• Mileage and usage type (commute, business)

Policy preferences

• Voluntary excess
• Type of cover (third-party, TPFT, comprehensive)
• Optional extras such as breakdown or legal cover

Providing accurate information ensures you get a fair quote and prevents issues during claims.

Additional factors that affect how your no claims bonus is applied

A no claims bonus is one of the most effective ways to reduce the price of your car insurance, but the way insurers apply it can vary between each insurance company and insurance provider. Understanding the finer details of your car insurance policy helps you avoid surprises at renewal and ensures you keep your discount for as long as possible.

How your policy documents define your discount

Your policy documents outline exactly how your bonus is earned and lost. Some insurers count every full consecutive year without a claim, while others only award a single year of bonus if you complete a full 12 months on the policy without any incidents.

Different brands also apply different limits:

• Some accept up to nine years of NCD
• Others cap at five years
• Some allow a limited number of claims before reducing your discount
• A few offer claims protection or claims discount protection for an extra fee

Even with protection, any payout can still increase the base premium of your motor insurance, but the discount percentage applied to your policy is preserved.

How insurers handle non-fault incidents and uninsured drivers

A common confusion comes from non-fault incidents. Many car insurance myths suggest these never affect your discount, but that depends on the insurer.

Situations to understand:

• If your insurer recovers the full cost from the at-fault driver’s insurer, you usually keep your NCD if the other driver cannot be traced, the incident may be treated as a fault claim
• Some insurers offer an uninsured driver promise, meaning your bonus is protected if an uninsured driver hits you and it wasn’t your fault

However, theft, vandalism and weather-related incidents may still affect your discount because your insurer is paying out.

Introductory discounts vs genuine no claims

Some new drivers receive an introductory discount when taking out a new policy, which can look similar to a no claims bonus but isn’t the same thing. This type of discount:

• Does not count as proof of no claims
• Does not transfer between insurers
• Does not carry the same value as earned bonus years
• Can be removed at renewal without warning

You usually need real proof of no claims discount (e.g., from a previous insurer) for the discount to be fully recognised elsewhere.

Additional rules for main drivers and company cars

Only the policyholder (the main driver) earns the no claims bonus. Named drivers cannot build it, unless the insurer offers specific “mirrored” or multi-car schemes.

Drivers using a company car may earn a letter of driving history if they were the main driver, which can sometimes be used as evidence when applying for a personal car insurance policy — but only if the insurer accepts it.

How your type of cover affects the bonus

Whether you choose:

• Third party only
• Third party fire and theft
• Fully comprehensive

…you still earn the same no claims bonus. The type of cover doesn’t affect the ability to build your NCD — only claims do. However, upgrading cover can sometimes reduce the risk of needing to claim, especially for theft or accidental damage, which indirectly helps protect the bonus.

Why some claims cost more than others

Even when your discount is protected, an accident may still increase the cost of your premium because insurers adjust the underlying risk. Incidents involving:

• Theft
• Damage from collisions
• High-value repairs
• Weather events
• Hit-and-run accidents

…may cause a bigger additional amount to be added to the premium at renewal.

FAQs about car insurance no claims bonus