Your no-claims bonus is one of the most important benefits you can accrue as a result of your driving history. It is a measure of your driving safety, and you, as a driver, are totally in control of the benefits it can bring to you. 

Your insurance company will reward you for safe driving and will measure the reward based on the length (in years) of your No Claims Bonus. Understanding how a No Claims Bonus is accrued, the benefits it brings, and why an insurance company holds it in such high regard is crucial to understanding your premiums and keeping them as low as possible.  

What is a No Claims Bonus?

A No Claims Bonus (NCB) is a method of calculating a reduction in the premium levels your insurer charges based on your record of safe driving. Every year you drive without making a claim to your insurer reinforces that you are driving safely and within the law. It’s the most common way of measuring the cost of your driving experience. 

Also known as a No Claims Discount, it can lead to substantial savings on your annual premiums. 

How Does The No Claims Bonus Work?

Each year that you drive without making a claim on your insurance adds a year to your No Claims Bonus. Over time, this accumulates. A person with a one-year No Claims Bonus can expect a reduction of around 20% on their next year’s premium. 

A person with between five and nine years without a claim can expect a much higher reduction. In some cases, depending on the insurer, this can reach up to an 80% reduction in your annual premium.

Can You Cap Out Your No Claims Bonus?

Yes, a No Claims Bonus is capped. For most major insurers, this is set at between five and nine years. So, even if you continue to drive safely for 10 or even 20 years more, your premium reduction will not go any further. However, since the reduction at the cap of five to nine years is already sometimes as high as 80%, then this is understandable.

How Much Can You Save With A No Claims Bonus?

With many major insurance providers, you can save up to 80% with a high No Claims Bonus. The cap differs between companies, but if you have, for example, nine years of driving without making a claim, the likelihood is that you will receive the highest possible reduction. Your No Claims Bonus will be at the highest level.

If you have two years of driving without making a claim, your No Claims Bonus will likely be at a lower level, possibly around 30% reduction on the full annual premium.  Each year of driving without making a claim until you reach your provider’s cap for accrued years further reduces your premium.

What types of motor insurance carry a No Claims Bonus?

The majority of personal-use vehicles can receive a No Claims Bonus. Drivers of cars, motorbikes and vans can each build their own No Claims Bonus. This bonus is attached to one single vehicle and cannot be built across multiple vehicles, despite the fact that you might be a safe driver in multiple vehicles.

How To Keep Your No Claims Bonus

Understanding how your No Claims Bonus is reduced by claims is crucial to giving you peace of mind while driving safely. If you make what is known as an At-Fault claim, that is, an accident which is completely your fault, your NCB will be reduced significantly and possibly to zero. 

However, not all claims will wipe out your No Claims Bonus (NCB):

  • Not-at-Fault claims: this is a claim where the accident wasn’t your fault, but your insurer was unable to reclaim costs from the other party. This can affect your NCB, but not necessarily wipe it out. It may simply be reduced.

  • Step Back Clauses: Many policy providers will include a clause whereby you can make a claim that won’t wipe out your No Claims Bonus entirely. It will simply step back in years accrued.

  • Windscreen damage: If you need to replace your windscreen, this normally falls outside your No Claims Bonus. You can usually claim this and still retain your full bonus.

  • NCB Protection add-on: Some insurance providers will offer an add-on to your policy that protects your No Claims Bonus against claims. You purchase it as an additional level of cover.

Can I keep my No Claims Bonus when changing insurers?

Yes. You own your No Claims Bonus – not your insurer. This is important because it means you can change to a new provider without losing your No Claims Bonus. You do not need to feel tied to one company because you have accrued a high No Claims Bonus with them.

No. Your No Claims Bonus is attached to a single insurance policy. So if you have two vehicles insured, each will have its own No Claims Bonus attached. Claiming for a crash involving one vehicle will not impact the premium of a second vehicle.

Under multi-car policies, the No Claims Bonus is similarly protected. A claim on one vehicle will not affect the No Claims Bonus on another vehicle listed on the multi-car insurance policy.

An accident that was not your fault is called a Not-At-Fault claim. If the other driver is insured and all costs are recovered from their insurer, your No Claims Bonus will not be affected. 

However, if the other driver is uninsured and costs cannot be recovered, your No Claims Bonus might be reduced. This is highly variable and depends on each provider’s rules and the nature of the accident.

If protecting your No Claims Bonus is uppermost in your mind, you can take out Step Back Cover. This protects you when making a claim without wiping out your No Claims Bonus. Your years accrued will simply be stepped back rather than deleted.

What Can Cause You To Lose Your No Claims Bonus?

There are a number of ways in which you can lose your No Claims Bonus:

  • At Fault claim: In many cases, an at-fault claim can significantly reduce or reset your No Claims Bonus, depending on your insurer and policy terms..

  • Insurance gap: If you don’t have cover for two years or more, your No Claims Bonus will also reset to zero. This is known as an insurance gap.

  • Multiple claims: If you make multiple claims but have No Claims Bonus protection on your policy, you will likely eventually have your No Claims Bonus reset. The protection clause does not cover an infinite number of claims.

What is No Claims Bonus protection?

No Claims Bonus protection is an add-on that you can purchase in addition to your normal policy, which provides protection to your No Claims Bonus if you make a claim. Essentially, you won’t have your NCB reduced to zero.

No Claim Bonus FAQ

Yes, you can pay to have your car fixed yourself and not file a claim. This won’t affect your No Claims Bonus.

No. Generally speaking, if you have roadside assistance as part of your insurance policy (normally comprehensive cover), then requiring a tow will not invalidate your No Claims Bonus. It is generally covered.

Once you have terminated an insurance policy with a provider, your No Claims Bonus remains valid for two years and can be restarted on a new policy at the same level. After two years, it returns to zero.

No. A No Claims Bonus is held by the policy owner, not by a secondary named driver. However, the named driver can build driver experience, and this can be converted into an introductory No Claims Bonus when starting their own cover.

Your previous provider can provide a No Claims Bonus certificate, which you can submit to your new provider. This should be evidence enough to carry your bonus forward.

Author: Séamus Ó Doirín | Chief Insurance Editor

Séamus Ó Doirín is a Donegal based QFA who has been writing about insurance since 2020. His main focus is getting people the best value for insurance in the Irish market. His writing covers all areas of insurance and is a valuable part of the Compare Insurance team. 

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