No Claims Bonuses: Here’s Everything You Need To Know

In plain English, a no claims bonus means cheaper car insurance. Here’s how it works and what you need to do to earn it…

What Is A No Claims Bonus?

Car insurance is an unavoidable source of expenditure for British motorists. If you want to drive on public roads, you need to insure your vehicle. That said, you can reduce your costs in a number of ways. One of them involves accumulating a no claims bonus (NCB). It’s essentially how car insurance providers reward their customers for not making a claim during the period of their coverage. Generally speaking, a provider will slash your premium for every 12 or so months that you don’t make a claim. However, how often you’ll receive a discount (and how much it’ll represent) depends on your provider.

Naturally, your discount should grow as you continue to avoid making claims. It remains valid for two years, too, regardless of whether you’ve been driving your vehicle. A no claims bonus is also useful when looking for a new provider. It demonstrates that you’re a low risk option and, as a result, providers will compete over your custom.

How Do You Get One?

NCBs are a great way of saving money on your car insurance. However, even careful drivers can lose what they’ve accumulated. Even a minor claim, after all, will set it back to zero. That said, drivers can consider getting a protected no claims bonus. This involves paying more but, usually, not as much as if you didn’t have an NCB discount. Generally speaking, named drivers don’t qualify for a NCB. This is because there’s no way to tell if they’ve actually been driving a given vehicle. That said, some black box technology is now able to differentiate between drivers – meaning some providers will cover primary and named drivers.

Ultimately, the best way to protect your NCB is to drive cautiously and to obey the Highway Code. If worst comes to worst, it could be cheaper in the long-term to simply avoid making a claim. How viable this is very much depends on the nature of the damage your vehicle has received. Incidentally, August is the cheapest month to renew your car insurance. Those who do so will save, on average, 10% when compared to those who do so in January. Just one more way to knock a little off of your premium.

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