No claim bonus

A no claim bonus, also known as a no claim discount rating, is a policy feature typically offered as part of comprehensive car insurance policies. It’s not usually available as part of a Third Party Property Damage or Third Party Fire and Theft car insurance policy.

Your no claims bonus rewards you for having a good driving and insurance record by discounting your annual car insurance premiums, and it typically increases with every consecutive year in which you don’t make an at-fault or non-recoverable claim. Most insurers who offer a no claim bonus cap their maximum no claim bonus after either 5 or 10 years and set a maximum discount of around or just over 50%.

No claim bonuses are also sometimes available on caravan and boat insurance products.

Your no claim discount rating will typically be calculated based on the number of years you’ve been with your current insurer without having made a non-recoverable or at-fault car insurance claim. If your insurer offers a no claim bonus, yours will typically start accruing after your first claim-free year.

Then, after each year you successfully go without a non-recoverable or at-fault claim, your no claim bonus will increase until you reach your insurer’s maximum no claim discount rating. Check your car insurance policy’s Product Disclosure Statement (PDS) to see your specific insurer’s maximum no claims bonus and how its rating scheme works.

Depending on the insurer you switch to, you may be able to carry over your existing no claim discount rating from your previous insurer. However, there are a few things to note when it comes to transferring a no claim bonus between insurers; for instance, some insurers don’t allow you to transfer your rating to a new car or different insured vehicle, and some insurance companies may limit or cancel your rating if you don’t drive for a certain number of years (usually over two years).

You may want to enquire with the new insurer before you take out a car insurance policy with them and check to see if your existing no claim bonus rating will carry across. Also, be sure to read the Target Market Determination (TMD) of a policy before purchasing it to see if it’s right for you.

If you make an at-fault or non-recoverable claim on your car insurance policy, your insurer may reduce or remove your no claims bonus, meaning your premiums will go up. However, some insurers may not reduce or remove your no claims bonus if you make a claim where you were not at fault.

No claim bonus protection is a feature offered by some car insurers that allows you to maintain your current no claims bonus if you make a claim for an at-fault accident on your car insurance policy. Note that no claim bonus protection is not offered by every car insurance provider in the market.

Additionally, no claim bonus protection only prevents your discount amount from changing; your car insurance premiums may still increase for other reasons even if you have no claims bonus protection in place.

You’ll also want to compare the cost of protecting your discount against the amount your discount saves you – you may find you’d be paying more in bonus protection than you’d be getting in premium discounts.

No, your no claim discount or bonus is solely a discount applied to your premium. Your premiums may go up for several reasons when your car insurance policy is renewed, some of which may be unrelated to your no claims discount rating or driving history.

If your insured vehicle is stolen, the ensuing claim you make will typically reduce your no claims discount rating but won’t always remove it from your policy entirely. If you have no claims bonus protection, your discount rating may be unaffected by one claim for theft.

No, generally your no claim discount rating will not be affected by a claim made for accidental damage to your windscreen or window glass. However, you’ll still need to pay your excess for the claim, and your premiums may go up after you make a claim.