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Car insurance no-claim bonus explained

Written by Chloe Adams Managing Editor Reviewed by Nomsa Dlamini RE5 qualified · 12 years in short-term insurance Updated 26 July 2026 Our editorial standards →

What is a no-claim bonus?

A no-claim bonus (or no-claim discount) rewards you for not claiming. The longer you go without a claim, the bigger the discount many insurers give on your premium. Making an at-fault claim can reduce or reset your bonus, which is why some drivers pay for small damage themselves rather than claim.

Key takeaways

A no-claim bonus is a discount for claim-free years.
The discount usually grows the longer you go without claiming.
An at-fault claim can reduce or reset your bonus.
Not-at-fault claims where costs are recovered may not affect it.
For small damage near your excess, paying yourself can protect the bonus.

How a no-claim bonus builds up

Each claim-free year, many insurers increase your no-claim discount, up to a maximum. It reflects that drivers who don't claim are lower risk. The exact structure differs by insurer, so check how yours works.

How a claim affects it

An at-fault claim typically reduces or resets your bonus, raising your premium at renewal. A not-at-fault claim where your insurer recovers the cost from the other party often has less or no effect. Ask your insurer how a specific claim would affect your discount before you claim.

How to protect your no-claim bonus

For small damage close to your excess, consider paying it yourself
Drive carefully and avoid at-fault incidents
Some insurers offer a no-claim-bonus protector - weigh the cost
Keep your details and drivers accurate to avoid disputes

Frequently asked questions

Does a no-claim bonus transfer between insurers?

Often, yes - many insurers recognise your claim-free history when you switch, which helps keep your discount. Ask the new insurer what proof they need, such as a letter or record of your claims history.

Should I claim for minor damage?

If the repair is close to or below your excess, or a claim would reset a valuable no-claim bonus, it can be cheaper to pay for minor damage yourself. Weigh the repair cost against the excess and the effect on your premium.

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