Should I protect my no-claims bonus?

Should I protect my no-claims bonus?

If you don't claim on your car insurance, your insurer will give you a no-claims bonus each year – which is a future discount on your policy. But if you need to claim, you could lose any discount you've built up, unless you pay to protect it. This guide looks at how it works and whether the insurance add-on is worth the money. 

What is a 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.  

What is no-claims bonus protection?


No-claims protection is an optional add-on to insurance premiums offered by some providers. It allows you to claim one or more times per year without impacting your no-claims bonus. You have to pay for it, and the cost and number of times you can claim varies significantly across providers.

Important. Having no-claims bonus protection will not stop your car insurance premium from increasing.

This might sound odd, but having the protection in place won't stop your insurance costs going up as a result of a claim.

Insurers will still take into account any claims you've made, and if they think you're more likely to claim in future, they'll increase your premium. After this, they'll apply any no-claims bonus you have.

Let's say your insurer has worked out that your premium should be £800, yet you've built up a discount of 50%, so you're actually paying £400. You have to make a claim, but because you've protected your bonus you keep the discount.

When you come to renew, because of the claim, your insurer decides that your premium should now be £1,000. With the 50% discount, you're now paying £500. So your premium has gone up – but the increase has been lessened by the discount.

Should I get no-claims bonus protection?


There’s no easy answer to whether paying for the extra protection will be worth it. No-claims bonus protection is essentially getting insurance on top of your insurance, and you can't predict whether something might happen to make you need to claim on or not.

If you've built up a high no-claims bonus over the years, and losing part or all of it would make your insurance much more expensive, no-claims protection might be worth getting, depending on the price. 

With any car insurance policy, our advice is never just auto-renew – always check to see if you can save, and this includes looking at the cost of protecting your no-claims bonus.

Can I keep my no-claims bonus if I switch insurance providers?

Yes, it's common practice that when you move to a different insurance provider, your no-claims bonus moves with you.

You just need proof of your bonus to give to your new provider. This will typically appear on your renewal letter from your old provider, though you can get in contact with it and it will give you proof if not.

Note that if you switch midway through your existing policy, you may not get your no-claims bonus for that year. 

Can I keep my no-claims bonus if there’s a gap between policies?

This depends on the length of that gap. If you take a break from driving and no longer need insurance for a period, your no-claims bonus will typically be valid up to two years after your policy ends and should be carried over to your next policy (though you may need to provide evidence).

Any longer than that and you will have to start building up your no-claims bonus from scratch again.

Cheap car insurance tips

We've a whole host of car insurance top tips and tricks to get cheap cover. Below is a quick round-up of where we'd suggest you head to next. 

Suggestions for you

  • Benchmark your cheapest policy using our Car Insurance Compare+ tool, with personalised MoneySaving tips.

  • Read our full Cheap car insurance guide, including nine ways to cut the cost of cover.

  • See our full Car insurance section with all our key tools and guides.

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