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Can I share my no claims bonus?
It can take years to build a really solid no claims bonus, but can you use it for more than one car, and can you share it with another driver in your household? We find out how to get the most out of your no claims.
How does a no claims bonus work?
A no claims bonus (NCB) is a percentage discount off your premium. Your discount increases for every year you drive without making a claim on your insurance.
The amount of discount you get depends on the insurer. For example, one year of no claims might earn you a 30% reduction in your premium when you come to renew.
Most insurers limit the number of years you can continue to build your no claims. This is often around nine years, although some insurers let you continue to build it for as long as 15 years. When you reach that maximum, your discount stays the same, but by this point, your discount will often be at least 60%-70% (some insurers offer even more).
NCB is also known as a no claims discount (NCD), the terms are used interchangeably.
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How claiming affects your no claims bonus
When you make a claim, you’ll lose some of your no claims bonus (typically two years’ worth). This will also mean your insurance premium rises. The more claims you make, the more discount you lose, for example:
- You have five years’ worth of no claims, giving you a 60% discount.
- Your base car insurance before the discount is taken off is £1,000.
- You pay £400 for your insurance after your NCB is applied.
- You have an accident and make a claim on your insurance, this reduces your discount to 40%.
- At renewal, you’d pay £600 (in reality it would be more as your base premium will increase after an accident).
What happens when I protect my no claims bonus?
You can pay to protect your no claims which means your discount will stay the same even if you make a claim.
Protecting your no claims doesn’t mean your premium won’t increase at renewal. If you have an accident, it will almost certainly mean you pay more for insurance (as you’ll be seen as a riskier driver). It simply means your discount remains the same.
Can I transfer my no claims to a new car?
Yes, if you buy a new car, you’ll be able to transfer your no claims to your new vehicle.
If you’re renewing your car insurance with a different insurer, you can also bring across your no claims bonus. Your old insurer will usually give you a letter that sets out the number of years of no claims you have.
Don’t forget – the value of the discount varies between insurers. For instance, five years of no claims might give you a 60% reduction with one insurer but a 65% discount with another.
Can I share my no claims bonus?
As a general rule, no, you can’t share your no claims bonus between cars. It can only be used on one car at a time.
In most cases, you won’t be able to share it with another driver in your household either. This is because a no claims has to be earned, being able to share it would defeat the purpose of the reward.
That said, there are a handful of exceptions to this and in a very few instances, insurers may let you share your no claims bonus with a spouse. This isn’t common practice and it’s at the discretion of the insurer; you may also have to meet specific conditions.
How does a mirrored no claims bonus work?
‘Mirroring’ is another exception to the rule. It’s when insurers let you use one no claims discount for two cars. It’s unusual and only a few insurers offer it, again, it’s at their discretion and there will usually be conditions you need to meet.
Insurers that currently offer a mirrored no claims bonus, include:
Can I use a no claims discount earned on a company car?
If you had a company car and you were the only named driver, your insurer may let you transfer the no claims you earned to a private car.
Insurers will usually only consider this if you were also insured to use the company car for personal reasons (social, domestic, pleasure or SDP cover). You may also be asked for proof from your employer.
Compare great value car insurance
Building up your no claims bonus is a great way to keep car insurance costs as low as possible. That’s not to say you should never claim on your insurance though, it’s simply about choosing what you claim for carefully.
As with all insurance policies, it’s crucial that the package you choose gives you peace of mind. So, while price is likely to be hugely important, it’s not the only factor to consider.
We’ve put together these detailed guides to help you explore your options before you start comparing quotes for great value cover: