A no claims bonus (NCB) is a discount on your car insurance for each year you don’t make a claim.

The longer you go without claiming, the bigger the discount usually becomes. That’s the simple version. The detail underneath is where it gets interesting.

What a no claims bonus actually does

NCB reduces the price you pay for insurance. It doesn’t give you money back or build up as a fund.

Think of it as a discount level attached to your driving record. The more claim-free years you have, the larger that discount tends to be.

It’s one of the main factors insurers use when setting your premium.

How it builds

Each full year without a claim usually adds one year of bonus.

After one year, you have one year NCB. After five claim-free years, you have five. It builds steadily.

Most insurers cap the maximum discount after several years, even though your record may continue to show more.

What happens if you make a claim

If you make a claim where your insurer pays out and can’t recover the cost, your NCB is usually reduced.

This often includes:

• Accidents where you’re at fault
• Single-vehicle damage
• Incidents where no other party can be held responsible

The reduction isn’t always total, but it can be significant.

Non-fault claims still matter

If another driver is clearly at fault and your insurer recovers the cost, your NCB may stay intact.

Even then, your premium can still change. Insurers look at overall risk, not just the bonus.

What protected no claims bonus means

Protected NCB allows you to make a limited number of claims without losing your bonus level.

For example, a policy might allow one or two claims within a set period without reducing your NCB.

The key point is this: the claim still exists. Only the bonus is protected.

Why premiums can still rise with protection

This is where confusion usually comes in.

Even with protected NCB:

• Your discount level may stay the same
• Your premium can still increase after a claim

That’s because insurers price risk based on your full history, not just the discount percentage.

Is protected NCB worth it?

It depends on how you use your car and how valuable your discount has become.

It may make sense if:

• You have several years of NCB built up
• Losing it would significantly increase your premium
• You want some stability after a single claim

It may matter less if your bonus is small or if the extra cost of protection outweighs the potential saving.

It softens the impact of a claim. It doesn’t remove it.

Who actually owns the NCB

The no claims bonus belongs to the main policyholder.

Named drivers usually don’t build their own NCB on that policy. Some insurers may recognise experience later, but it isn’t guaranteed.

This often becomes relevant when someone takes out their own policy for the first time.

Using NCB across policies

You can normally only use an NCB on one policy at a time.

It can’t usually be split between multiple cars, although some insurers offer mirrored discounts as a separate feature.

The original bonus stays tied to a single policy.

Proof and gaps

When switching insurers, you’ll usually need proof of your NCB from your previous provider.

If it isn’t used for a period of time, it may expire depending on the insurer’s rules.

Long gaps can reduce its value or remove it altogether.

Why NCB influences decisions

Drivers often think twice before making smaller claims because of the impact on their bonus.

Paying for minor damage privately can sometimes preserve a larger saving over time.

That trade-off sits at the centre of how NCB works in practice.

It’s not a reward in the traditional sense. It’s a pricing tool that reflects how you’ve used your policy over time.