Using a No-Claims Bonus (NCB) is one of the most effective ways to lower your car insurance premiums in the UK. A No-Claims Bonus, also known as a No-Claims Discount (NCD), is a reward from insurers for not making any claims over a specified period. It’s typically a percentage reduction on your premium for each claim-free year. Here’s how you can use your NCB to lower your car insurance premiums:
1. Understand How the No-Claims Bonus Works
- What Is It?: Your No-Claims Bonus is a discount given by insurers for every year you drive without making a claim. For example, after one year of claim-free driving, you may receive a discount of 30%, two years could mean a 40% discount, and so on.
- Typical Reductions: Generally, the longer you go without making a claim, the bigger the discount. After about 5 years of no claims, you can often get the maximum discount, which can range from 60% to 70% depending on the insurer.
2. Shop Around for the Best Deals
- Compare Quotes: When renewing your insurance or shopping for a new policy, always compare quotes from different insurers. Many companies will offer a discount based on your NCB, but some may offer larger discounts than others.
- Use Comparison Websites: Websites like Compare the Market, GoCompare, and MoneySuperMarket let you compare prices from multiple insurers, including those that reward no-claims drivers. Always factor in the No-Claims Bonus when checking premiums on these sites.
3. Keep Track of Your No-Claims Bonus
- Track Your Claims-Free Years: Always ensure that your insurer records your claim-free years. If you’re unsure, ask for an NCB certificate from your current insurer when you renew or switch. This can act as proof of your bonus when moving to another insurer.
- No Claims History Records: If you’ve been driving claim-free for several years, ensure that your NCB is correctly recorded and reflected in the policy documents. Some insurers may require proof of your no-claims history from your previous insurer to apply the discount.
4. Transfer Your NCB to a New Insurer
- Switching Insurers: If you decide to change car insurance providers, you can transfer your NCB to the new insurer, potentially lowering your premiums. Most insurers accept NCBs from other providers, although they may have specific requirements or limits on how much of a discount they’ll offer based on your bonus.
- Check Transferability: When switching insurers, check that the new provider accepts your No-Claims Bonus and ask about any restrictions on the amount of discount you can receive. Some insurers might apply a maximum NCB discount cap.
5. Protect Your No-Claims Bonus
- Purchase NCB Protection: Some insurers offer a “No-Claims Bonus Protection” feature, which allows you to make a certain number of claims (usually 1 or 2) without losing your bonus. While this feature may add to your premium, it can be worth it if you’re concerned about losing your discount in the future.
- Cost of Protection: Be aware that NCB protection does not make claims completely free of cost. It usually adds a small fee to your premium, but it can be beneficial if you’re at risk of making a claim (for example, if you’re involved in minor accidents or if other drivers are prone to damage).
6. Don’t Let Your No-Claims Bonus Expire
- Keep Your NCB Active: Some insurers require that you have a claim-free history for a consecutive number of years to maintain your NCB. If you don’t use your NCB for a certain period (often 2 years or more), it can expire, and you may lose the discount. Ensure that you renew your policy or provide evidence of your claim-free history within the required time frame to maintain your NCB.
7. Combine Your No-Claims Bonus with Other Discounts
- Multi-Vehicle Discounts: If you insure multiple cars with the same insurer, you might be able to apply your No-Claims Bonus across all vehicles, or at least receive a discount for insuring multiple cars.
- Driver Discounts: Some insurers offer additional discounts for factors like being a safe driver, paying annually instead of monthly, or being a member of certain organizations. Combining these discounts with your NCB can significantly reduce your overall premium.
- Install Security Features: Some insurers offer extra discounts for vehicles with additional security features (like alarms or trackers). If you combine this with your NCB, you might see even further reductions.
8. Maintain a Clean Driving Record
- Keep Your Claims-Free Record Intact: To maintain or increase your NCB, always strive to drive safely and avoid accidents. Even minor claims can affect your NCB, so staying accident-free is key to keeping your premiums low.
- Consider Your Driving Habits: Avoid making small claims, as these might not be worth it in terms of your NCB. Some minor incidents (e.g., small scratches or fender-benders) might not significantly impact your premium in the long term, but losing your NCB can.
9. Avoid Non-Accident Claims
- Avoid Other Claims That Could Affect NCB: Keep in mind that certain claims, such as for theft, fire, or windscreen repair, might not affect your NCB. However, it’s still advisable to check the specifics with your insurer, as different companies handle non-accident claims differently.
10. Use Your No-Claims Bonus When Shopping for New Policies
- Leverage Your Bonus: If you have a substantial No-Claims Bonus, don’t be afraid to use it when negotiating or looking for quotes. Many insurers will offer competitive rates for those with a good no-claims history.
- Use Online Tools: Online quote tools often allow you to input your NCB details, and many insurers will automatically apply a discount based on the number of claim-free years you’ve had.
Summary: Maximizing Your No-Claims Bonus
- Shop around: Always compare quotes, using your NCB to get lower premiums.
- Transfer your NCB: When changing insurers, transfer your NCB to get the best possible deal.
- Protect your NCB: Consider NCB protection if you want to keep your bonus intact after making a claim.
- Maintain a clean driving record: Avoid accidents and minor claims to keep your NCB active.
- Combine discounts: Use your NCB in conjunction with other discounts for maximum savings.
By effectively managing and using your No-Claims Bonus, you can significantly lower your car insurance premiums and save money in the long run. Always ensure that your NCB is accurately recorded and apply it when renewing or switching insurers.
