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Is my no claims discount still valid after a gap between policies?

Is my no claims discount still valid after a gap between policies?

Maintaining a no claims discount is one of the simplest ways to potentially lower the cost of your car insurance over the longer term. But how does it work if you want to swap policies, stop being the main policy holder or change providers? And what if you’ve taken a break in cover between driving your cars?

Daniel Hutson
From the Motor team
minute read
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Posted 29 OCTOBER 2019

What is a no claims discount?

If you go a year without making a claim on your car insurance policy you’ll receive a no claims discount or bonus (NCD), which could mean money off your renewal premium. Each year’s worth of NCD gives you a discount on your car insurance premium. So, the more years you drive consecutively without claiming, the greater the saving you could make. Each full year must be with the same insurance provider, so you won’t earn a bonus if you cancelled or switched your policy to a new provider part way through the year.

Can a named driver achieve a no claims discount?

In most cases, it’s only the policyholder or main driver that accumulates a no claims discount, although some insurance providers may extend that to a named driver – you’ll need to check with your provider.

Can I carry my no claims bonus over after a gap in policies?

That depends how big that gap is and who your insurance provider is. Most insurance providers will say a no claims discount is invalid if you have a break in your car insurance of two years or more, where as other providers may go to three years. So, it pays to shop around and ask questions. 

What if I’ve been driving a company car?

If you’ve been driving a company car and your employer has been paying your insurance, letting your insurance provider know you’ve had no previous claims could save you some money when it comes to sorting out your private car insurance.

If this is the case, then the insurance provider will usually want to see some written evidence. You’ll typically need to have been the sole driver of the vehicle and been insured for social, domestic and pleasure use (as opposed to using a company pool car).

Likewise, if you’ve been living abroad, you could also transfer any NCD earned – although this is at the discretion of your insurance provider. As with company cars, you’ll need to provide written evidence (in English) of your insurance history, confirmation of your name, car and when your policy ended.

How much could a decent no claims discount build up to?

  • According to recent research by Coverbox, the value of your discount is decent in year one but doesn’t grow at the same rate in the following years. The average first-year no claims discount (NCD) was 26%, with only low single figure additions after that
  • Reductions will vary between providers, so it’s worth checking what each provider offers
  • There’s no standard maximum number of years that you can accrue no claims. Some insurance providers will cap it at five years, others nine and some will even let you input 25 or more years when comparing the market
  • But if you do have an accident and you’re at fault, your established no claims discount could come tumbling down. In many cases your number of years of no claims will be reduced (sometimes called ‘stepping back’) rather than being wiped out in one go
  • Even if you claim for an accident where you’re not to blame, your no claims discount could be affected unless you’re able to reclaim all costs from the person who was at fault; in which case it might not
  • Minor repairs like windscreen chips and scratches, will probably not affect your NCD, but make sure to check your policy just in case

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