No-claims bonus – what it is and how it works

This is the discount that insurers offer when you don’t claim on your policy. The discount increases with each year that you don’t make a claim.

It can be generous too – the discount typically ranges from 30% after one year to 65% or more after five years.

But if you have an accident and you claim for it, you generally lose two years’ worth of no claims bonus and your premiums go up.

If you have more than one accident in a year, you might lose all your no-claims bonus.

Even if you don’t make a claim, it’s important to tell your insurer about any accidents you’ve been involved in. Fail to do this, and any future claims might be rejected.

You can protect your no-claims bonus by paying for an add-on called ‘no-claims discount protection’. This means you can make claims without it affecting your bonus.

You’re usually allowed to make one claim in one year, or two claims in three years, without losing your no-claims bonus.

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