Each insurer’s no-claims bonus scheme is structured differently, varying in the size of the discounts and the number of claims-free years it takes to earn them. But typically, you’ll earn a 30% discount after one year without a claim, around 40% for three years, and 60% for five.
Maximum discounts range from 40% to 80%, and the number of years you’ll need to reach the top of the scale range from five to 15. But those are the extremes. More typical maximums are 60% and nine years.
Built up a hefty no claims bonus saving you hundreds of pounds annually? While you shouldn’t be excited to submit a needed insurance claim, it won’t set your no claims discount back to zero. Insurers will often simply move you down to a lower tier: from five years to three, say.
You also shouldn’t be afraid of moving to a new insurer or buying a new car if you have a valuable no-claims bonus accumulated. You can usually transfer no claims records between insurers, if you provide proof from your older insurer, and assign it to a new vehicle.
If you want to guard your no-claims bonus, you can take out a no-claims discount protection as an extra on your insurance policy. This cover allows you to make a maximum number of claims - usually two or three claims in three years - without losing your no-claims discount. The cost is usually around £60 annually but could be worth it if you’re saving hundreds of pounds annually with your discount.