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No Claims Discount
Discounts for Car Insurance UK quotes online explained

No Claims Discount

Sometimes called "no claims bonus", NCB or NCD, most Car insurers in the UK allow premium discounts for those policyholders with claims-free records.
The level of the discount allowed can vary depending on the class of motor insurance concerned e.g. the discounts allowed for private cars are usually considerably higher than those allowed for commercial vehicles.

Commercial vehicles insured on a “fleet” basis are effectively rated on the basis of the claims experience of each risk, and the question of a no claims discount (NCD) does not normally arise.

There is no standard scale of NCDs, but the following are fairly typical of the discounts provided in private car insurance.

Period of Insurance NCD 1 year (i.e. the preceding year) 30%

2 consecutive years 40%

3 consecutive years 50%

4 or more consecutive years 60%

Most insurers operate a “step-back” facility under which, if an insured makes only one claim during the period of insurance, any NCD which has been earned will be reduced e.g. from 60% to 40%, from 50% to 30%, or from 40% to nil.

Policyholders can “protect” their car insurance discount.
In return for a slightly higher premium, a policyholder with maximum NCD can retain their discount if he or she has made no more than, say, two claims in three periods of insurance.
Alternatively, no additional premium is required, but the scale of discounts is marginally reduced.

Note, however, that it is the discount that is protected.
Insurers need to take into account a person’s claims history in setting the next year’s premium, whether or not the discount is protected.
Policyholders will, therefore, need to consider whether, having notified the insurer of the circumstances, it is in fact economic to claim under the policy.
The NCD is usually unaffected if the car insurer can make a full recovery of its outlay e.g. from the liable party’s insurer, or if the policyholder recovers all uninsured losses (such as an accidental damage excess).

Claims for windscreen damage do not normally affect NCD entitlement.

Sometimes the NCD will be reduced at policy renewal time if a claim is expected to come in, or is still waiting to be settled.
The discount may be reinstated, however, if the insurer subsequently does not have to pay out under the policy.
The NCD benefit was originally limited to policyholders renewing their insurance with their existing insurer, but it is now standard practice for insurers to take into account NCD entitlement earned with another insurer.
Proof of the entitlement will be required, however, usually in the form of the renewal notice issued by the last insurer.
Where the renewal notice has been lost, confirmation of the NCD can usually be obtained from the insurer.
Normally, the NCD attaches to the car insured under the policy (or any replacement if this occurs during the period).
If a second car is purchased, the NCD normally has to be earned from the start since, even though driving may be restricted to one person, the car can still be at risk of theft or damage.
Some insurers are, however, prepared to allow the discount earned on one car to be carried over to the other.

There are likely to be conditions though, in particular concerning the number of drivers with access to each car.
Some Car insurers are also prepared to give special introductory discounts for the second car. It can pay, therefore, to shop around.

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