All About Your No-Claims Bonus (NCB)

Posted on: 23 April 2021 at 11:43 am
no claim bonus protection

What does a no-claims bonus mean?

A no-claims bonus is a yearly saving on your annual car insurance premium. It is calculated according to how many years you’ve been driving without making an insurance claim. A discount scale is applied on each year that you don’t make a claim.

The discount increases each year you don’t claim until you reach the maximum limit. This is because the longer you spend driving without any claims, the less risk you pose to the provider. The maximum limit varies among providers but is usually between five and ten years.

You can build up a no-claims bonus on the most common motor insurance types, including fully comprehensive, and third-party.

How do you prove a no-claims bonus if you switch providers?

There are a number of ways you can prove your NCB:

  • Some insurers will send proof of no-claims bonus as part of your renewal letter. Other providers will only include NCB proof in your policy cancellation document.
  • A few providers will get in touch with your previous provider, but it is more likely that you will have to ask your former provider for proof of NCB. Make sure you have your old policy number to hand.

Once you have completed your new policy’s application process, the new insurance provider will set you a time limit for you to send them proof of your NCB. This is usually between 7 and 21 days. You must meet the deadline to avoid an increase in premiums or the policy even being cancelled.

Photocopies are not always acceptable, so if you are required to send original documents, take photos of the originals for yourself and send them via recorded delivery. Most insurers will accept proof of NCD issued by your broker. However, a few can be fussy and ask you to get written confirmation from your previous insurer instead.

Once you have sent the proof, you should receive confirmation within seven days. Don’t assume it has been received – you could be unwittingly driving uninsured. If you haven’t heard back after ten days, contact them to discuss the delay.

What exactly is a protected no-claims bonus?

If you have built up a nice bank of NCB years, it might be a good idea to safeguard the discount with a little extra protection in the form of a protected no claims bonus.

This means paying a small charge in addition to your main car insurance premium and providing you with a safety net if you need to make a claim. A protected no claims bonus allows you to have a certain amount of at-fault claims before affecting your no claims bonus – this is usually two claims each year.

Will a protected NCB stop my premium going up after a claim?

It depends. Protecting the no-claims discount just safeguards the discount on your insurance premium. The annual premium itself could still be increased in response to your overall risk factor and pricing trends in the general insurance industry. Your provider will look at your claims history to work out your annual premium and apply your no-claims bonus at the end.

Can I still get car insurance without a no-claims bonus?

Although many drivers are enjoying multiple years of no-claims bonuses, others aren’t as lucky. Several circumstances could leave you without a no-claims bonus, such as a collision with an uninsured driver, at-fault claims, and even damage due to weather. If you have only recently passed your driving test or are in your late teens or early twenties, having a zero-year no claims bonus may also lead to a considerable increase in your premium.

Can I use my Foreign NCD to get a discount?

Yes, unlike our competitors, here at Got2Insure we accept NCD from your previous insurer even if they are not based in the United Kingdom. Therefore, if you have accrued seven years NCD in Spain for example, you will keep that entitlement here in the UK.

Do I earn NCD if I’m a named driver on the policy?

Unfortunately, no! You only earn the NCD if you are the policyholder. As such if you are only a named driver on a policy for four years and are accident free, you still have zero NCD years.