Is 9 years the maximum no-claims bonus?

While the majority of UK Insurance providers will cap their no-claims bonus at 9 years, this isn’t always the case. Some insurers will allow you to even build up a no-claims bonus for a maximum of 20 years. A no-claims bonus can help cut down your car insurance premiums by hundreds of pounds. Many NCDs will offer you discounts of up to 30% for your first year of no claims alone. This can be built up to 60% or even 70% with some insurers, bringing even greater price reductions to your premiums. The reason for insurers imposing limits on the number of years that a no-claims bonus can be built up is simple. If a discount is continually added to your premiums each year indefinitely, you could theoretically get your car insurance down to an unsustainably low price for the insurer.

• Despite some 5-year no-claims bonuses offering reductions of up to 60% with certain providers, there are some 20-year no-claims bonuses that will surprisingly only offer a 70% premium reduction. This is because with each additional year added to your no-claims bonus, the size of each additional discount will typically decrease.
• It was found that from the 3rd year onward for most no-claims bonuses, the additional discount to premiums was only a few percentage points. This is in comparison with the typical jump from 0 to 1 year of no claims, which typically saw price reductions of around 30%.

The easiest way of seeing how many years you have on your no-claims bonus is to check your insurance renewal documents. These can give you details on your policy as well as any no-claims discount. You can commonly find these in the following.

• Your renewal letters
• Online insurance account
• Contact your provider directly

You cannot technically insure two cars under the same no-claims discount, however there are some other ways you can use a no-claims bonus on different vehicles and policies. For more information refer to the following guide, Can I insure two cars with the same no-claims discount?

The best way to think of no-claims bonus protection is that you are essentially getting insurance for your insurance. Some drivers, particularly young drivers with little years behind the wheel can benefit massively from the reductions offered by a no-claims discount. This would mean that the cost of protecting your no-claims bonus, most providers charge between 10% and 30% extra on your premium, could actually be worth it when compared with the savings of your no-claims discount. In short…whether you decide to protect your no-claims bonus is largely down to whether it is worth the cost of protecting it.

Typically you won’t be able to transfer your no-claims discount between different vehicle types, such as from car to motorbike or car to van. This is simply because your no-claims history whilst driving a car won’t necessarily demonstrate to insurers that you are at low risk of making a claim if you start driving another vehicle type. With this said however it is still worth checking with individual insurers as some may permit a no-claims bonus to be honoured if you insure another vehicle type.

Yes, insurers are not obligated to give a no-claims discount to their customers -although it is generally not a good idea as this will make them less competitive compared with insurers that do. Whilst insurers are within their rights not to offer you a no-claims discount, they will typically have some form of no-claims discount structure in place. When changing insurers, it is important to remember that not all insurers have equal no-claims discount schemes. Your current discount percentage may well change to whatever your new insurer has set for the number of years accrued on your NCD. This means a 5-year no-claims bonus earning you a 60% discount with your current insurer may only get you a 50% discount with your new insurer. This change may still be worth it if the new insurer’s premiums are significantly lower than the current provider with a more generous NCD.

• • No claims discounts do not stop your total premium costs from rising – they simply give you a discount on the total amount.

• • Insurers typically do not accept a NCB transfer from another driver such as from a parent to young driver.

• • Even fault-free accidents can impact your no-claims bonus – you should check with your insurer for details