Should I protect my no-claims bonus?

A no-claims bonus (also sometimes referred to as a no-claims discount) is an optional feature of most car insurance policies, whereby if you don't make any claims in a year, you get a discount on the next year's policy as a 'reward'.

This can increase each year that you don't make a claim and can result in some serious discounts. For example, a provider might give you a 30% to 40% discount if you don't claim in your first year, and then offer an additional 10% if you repeat the feat in your second year and beyond.

Insurers are essentially rewarding you for not making them pay out – the less you claim, the more profitable a customer you are for them. After a while this can make your insurance a lot cheaper.

If you want to understand more about no-claims discounts, read on. Alternatively our full guide to cheap car insurance also has plenty of tricks to help you save, and you can compare quotes and get bespoke tips with our Car Insurance Compare+ tool.

What happens if I have to make a claim?

If you're involved in an accident and you make a claim that your insurance provider ends up paying out on, it'll typically reduce your no-claims bonus by a number of years or, depending on your provider, you could lose it completely. 

There are some circumstances where you can claim on your car insurance without it affecting your no-claims bonus, though again this usually depends on your provider.

• If you’re in an accident that you can prove is not your fault, you usually won’t lose your discount, as the other driver’s insurance company will be the one to pay out.
• Some small repairs are also sometimes exempt from impacting your no-claims bonus, such as fixing cracks in windows – though this varies by provider.