Home insurance no claims discount - how does it work?
People associate no claims discounts with car insurance, but did you know you can also get a no claims discount on your home insurance? Here’s what you need to know.
People associate no claims discounts with car insurance, but did you know you can also get a no claims discount on your home insurance? Here’s what you need to know.
How can I get a no claims discount on my home insurance?
As with car insurance, if you don’t claim on your home insurance for 12 months, you could get a discount on your premium the following year. If you don’t claim the year after that, you may get an even bigger discount, and so on – for up to five years.
To qualify for a no claims discount (NCD), you’ll need to keep your home insurance for at least a year. After that, many insurance providers will let you transfer your discount to a new policy, so you can switch insurance providers.
Does a home insurance no claims bonus work the same way as on my car?
Not quite. Home insurance providers – unlike car insurance providers – don’t need to know if a claim was your fault. Regardless, if you don’t claim for 12 months, you could receive a discount the following year.
How much can I save with a no claims discount?
Your no claims discount will vary, depending on your insurance provider. That’s why it’s worth shopping around and comparing policy details before you buy.
It’s also worth remembering that insurance providers consider all sorts of factors when calculating your premium. For example, extreme weather, or a rise in Insurance Premium Tax (IPT), could increase the cost of your policy. This could mean you’ll pay more when you renew, even if you don’t claim.
When should I claim on my home insurance?
It’s only worth claiming on your house insurance if what’s been lost or damaged is worth more than the cost of claiming.
It’s not always worth claiming for minor damage or the loss of something inexpensive. As well as losing your no claims discount, you’ll have to pay an excess (the amount you pay towards any claim). You could find it’s cheaper to replace the item, or cover the repair costs yourself.
If you’re claiming for major damage or the theft of something valuable, you’re probably better off making a claim. Even then you’ll need to consider how much excess you’ll need to pay and whether claiming will increase your premium.
Will claiming on my contents insurance affect the no claims discount on my buildings insurance?
Fortunately not. Claiming on your buildings insurance doesn’t usually affect the NCD on your contents insurance, and vice versa – but check your policy to be sure.
How can I lower my chances of having to make a home insurance claim?
These tips could reduce the chance of having to make a buildings insurance claim:
- Install a smoke alarm
- Carry out regular maintenance checks and keep your property in a good state of repair
- Insulate your pipes to prevent them freezing over the cold winter months.
Here’s how to lower the chances of claiming on your contents insurance:
- Install a burglar alarm and/or motion-sensitive lights to deter thieves
- Fit window locks
- Keep valuables out of sight
- Lock outbuildings, such as garden sheds and garages
- Store ladders out of sight.
When it comes to shopping for insurance, you’ll find that no claims discounts and premium prices vary between insurance providers. That’s why it makes sense to compare home insurance policies before committing.
Frequently asked questions
Does the no claims discount cover my contents or my buildings insurance?
You can get no claims bonus for both insurance types – when you’re shopping around for policies, ask insurance providers what discounts they offer.
Is there anything I can claim for without losing my no claims discount?
There are certain home insurance add-ons you may be able to claim for without affecting your discount. These are:
But every policy is different, so check the small print.
Can I make a claim and keep my no claims discount?
Some insurance providers let you make one or two claims in a year and keep your no claims bonus for a fee. But you’ll need to look at the cost of protecting your no claims discount to see if it’s worth it.
Anna McEntee – Home, travel and pet insurance expert
Anna’s all about delivering fantastic insurance products at a great price. Value is the most important thing for Anna, as she cuts through the jargon and finds what’s most important and worth your hard-earned money.
Andy Webb - Insurance expert
Andy Webb is an award-winning personal finance journalist and broadcaster. Combined, his Be Clever With Your Cash blog, Andy Clever Cash YouTube channel and Cash Chats podcast have been read, watched and listened to by millions.