Is my no-claims bonus still valid after a break between policies?

Building your no-claims discount is one of the easiest ways to lower the cost of your car insurance. But how does it work if you want to swap policies, stop being the main policyholder, or switch insurance providers? And what happens if you’ve taken a break in cover? Here’s the lowdown.

Building your no-claims discount is one of the easiest ways to lower the cost of your car insurance. But how does it work if you want to swap policies, stop being the main policyholder, or switch insurance providers? And what happens if you’ve taken a break in cover? Here’s the lowdown.

Daniel Hutson
Motor insurance expert
minute read
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Posted 20 SEPTEMBER 2021

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 (sometimes called a NCD or no-claims bonus). This could mean money off your premium when you come to renew.

Each year’s worth of NCD gives you a discount on your car insurance premium. So, the more consecutive years you drive without claiming, the bigger the saving you could make.

Can a named driver achieve a no claims discount?

It’s usually only the policyholder or main driver who get a no-claims discount, although some insurance providers may extend that to a named driver – you’ll need to check with your provider.

If I have a gap between policies, can I carry over my no-claims bonus? 

That depends on your insurance provider and how long it’s been since you last had cover. Many insurance providers will say a no-claims discount is invalid if there’s a break in your car insurance of two years or more. But other providers may go to three years. That’s why 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 with your employer paying your insurance, it’s worth telling your insurance provider that you’ve had no previous claims. This could save you some money when it comes to sorting out your private car insurance.

The insurance provider will usually want to see some written evidence of your no-claims bonus. Typically, you’ll need to have been the sole driver of the vehicle and insured for social, domestic and pleasure use (as opposed to using a company pool car).

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

How high can I build my no-claims bonus? 

  • Each insurance provider has a different no-claims discount policy, so the maximum you can get will depend on the provider. That’s why it’s worth checking what each one offers.
  • There’s no standard maximum period over which you can accrue a no-claims bonus. Some insurance providers cap it at five years, others at nine. Some may even let you input 25 or more years when comparing the market.
  • Be warned, if you have an accident and you’re at fault, your no-claims discount could come to an end. However, your insurance provider may reduce your number of years’ no claim, rather than wiping it out in one go. (This is sometimes called ‘stepping back’ .) This can vary between providers, so do check.
  • If you claim for an accident where you’re not to blame, it could still affect your no-claims discount. Unless, that is, you can reclaim all costs from the person who’s at fault.

What if my insurance provider unfairly increases my premium, despite my no-claims bonus? 

If you’re not happy with the way your insurance provider has handled your no-claims bonus, the first thing you should do is take it up with them.

If you make a complaint, your insurance provider has eight weeks to give you their final response. If you’re still not happy, you can then take it to the Financial Ombudsman.

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Frequently asked questions

What’s a protected-discount policy?

Some insurance providers offer a protected-discount policy. This lets you make a certain number of claims over a set period without it affecting your no-claims bonus. Some providers may require you to have a certain amount of NCD accrued before you can take out this policy, though, and it may affect the cost of your premium, so be sure to do your research.

Can I transfer my no-claims discount to my partner?

Yes, many insurance providers will let you transfer your no-claims bonus to another person. However, many will only let you do it once, and you won’t then be able to use that NCD on another policy.

Can I switch my no-claims bonus to another insurance provider?

Lots of insurance providers will let you transfer your NCB over from another provider – you’ll just have to give them proof of your bonus. Your old insurance provider can give you this.

Can I earn a no-claims bonus on a temporary insurance policy?

You can’t usually earn a no-claims discount on a temporary car-insurance policy, even if you have a year’s worth of temporary policies. But each insurance provider is different, so it’s always worth checking.

What is multi-car cover?

If you’re a household with more than one car, you can opt for multi-car insurance. This means all your cars are on the same policy and could save you money. When it comes to your no-claims bonus, if you claim on one car, it won’t affect your discount on the others.

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