What is a No Claim Bonus?

A no claim bonus is a discount on a comprehensive car insurance premium. You earn it by going without at-fault or non-recoverable claims during the policy year. The discount increases each year until you reach the insurer’s maximum level. 

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How it works 

Insurers use an internal rating system. Each rating has a set discount. You move up one rating when you finish a policy year without an eligible claim. A new at-fault or non-recoverable claim can reduce or reset your rating, depending on the rules in your policy.

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Most insurers allow you to transfer your earned rating when you switch, if you provide proof and the new insurer accepts it. Some insurers use different rating labels, but the idea is the same.

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Example rating scale: 

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• Some insurers cap at 60%, a few go to 65% or even “Rating 1+” or lifetime ratings that can reach 70% in rare cases.
  
  
• A couple of others use slightly different labels, such as “Protected 5+” instead of Rating 1, but the discounts line up closely.

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What affects your NCB rating 

These claims can reduce your rating or reset it:

• At-fault accidents
• Windscreen or glass claims that sit outside the optional glass-cover benefit
• Any claim where the insurer pays out and cannot recover the money

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Many insurers do not reduce your rating if the claim meets certain conditions, such as:

• A not-at-fault accident where the other party’s details are provided and recovery is possible
• Hail or storm damage, depending on the product
• Glass-only claims where you have optional windscreen or glass cover and the PDS states these claims are ignored for NCB

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You should check the PDS and any premium or discount guide to confirm how your insurer handles each type of claim.

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Protected no claim bonus

You can buy an optional extra that protects your current rating. This can let you make one at-fault claim in a policy period without dropping back, subject to the product rules. This is often used by drivers with a high rating.

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What are the coverage and exclusions

• A no claim bonus is a discount only. It does not provide any insurance cover.
• It does not reduce your excess.
• It does not replace any policy benefit.
• It does not stop your premium from increasing for other reasons, such as higher base premiums or changes in your risk profile.

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Who it applies to

Drivers who hold a comprehensive car insurance policy with an insurer that uses an NCB system. It does not apply to compulsory third-party insurance.

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Key terms you need to know

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Simple examples

1. You finish a policy year without any claims. Your insurer moves you from rating 4 to Rating 3.
2. You hold Rating 1 and make an at-fault claim. Your insurer drops you to a lower rating based on the scale in your PDS.

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Documents insurers may ask for

1. A no claim bonus proof letter
2. Your policy schedule
3. Past claim details

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When to talk to a broker

If you’re not sure whether a past claim will affect your bonus, want to protect a high rating or are switching insurers and need the best deal, an insurance broker can check exactly what each insurer will offer you.

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Need expert Help?

If you are unsure how this applies to your policy, you can speak to a Tank Insurance broker for guidance you can trust. 

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