How does no claims discount work?

For each year you don't make a claim on your car insurance, you earn one year of no claims discount (NCD). This discount reduces your premium, typically starting at around 30% for 1 year and reaching 60-70% for 5+ years. The exact percentages vary between insurers.

What is the maximum NCD?

Most UK insurers cap the no claims discount at around 5-9 years, giving a maximum discount of 60-75% depending on the insurer. Some insurers offer an accelerated NCD that reaches the maximum faster, while others reward long-term customers with additional loyalty discounts.

Should I protect my no claims discount?

NCD protection typically costs £20-£60 per year and allows you to make one or two claims without losing your discount. It can be worth it if you have a large NCD (5+ years) as rebuilding it takes a long time. However, even with protection, your base premium may still rise after a claim.

Can I transfer my NCD to a new insurer?

Yes, your NCD is transferable between most UK insurers. You'll need proof of your NCD from your previous insurer, usually in the form of a renewal letter or NCD proof letter. Most insurers require this within a certain timeframe (typically 2 years) of your previous policy expiring.

What happens if I make a claim?

Without NCD protection, a fault claim typically reduces your NCD by 2 years (some insurers reduce it more). A non-fault claim where costs are fully recovered may not affect your NCD, but this varies. With NCD protection, you can usually make one fault claim per year without losing discount years.

CarCalcs

No Claims Discount Calculator — NCD Savings

Calculate how much your no claims bonus saves on your car insurance premium.

Base Premium (before NCD)

Years No Claims

Insurer Discount Scale

NCD Protection Cost

Include NCD Protection

Add NCD protection to prevent losing your discount after a claim

How We Calculate This

How No Claims Discount Works

The NCD is applied as a percentage reduction to your base premium:

Year 1: ~30% discount
Year 2: ~40% discount
Year 3: ~50% discount
Year 4: ~55% discount
Year 5+: ~60-70% discount (maximum)

The Formula

Premium after NCD = Base Premium x (1 - NCD Percentage / 100)

NCD protection adds a small fee but prevents loss of discount after a claim.

Frequently Asked Questions

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Last updated: February 2026

All calculations are estimates. Actual figures may vary based on driving conditions, vehicle specifications, and other factors.