No-Claims Discounts Explained

Updated Oct 11, 2026 · Hannah Breckett · 4 min read

A no-claims discount can make a big difference to your premium. Understanding how it works helps you protect it.

What this article covers

✓ How it builds
✓ What affects it
✓ Protection
✓ Transferring it
✓ Deciding whether to claim

Many insurers offer a discount for each year you hold a policy without making a claim. Over several years, this can significantly reduce premiums.

The rules for how claims affect it vary, so it is worth reading the details.

How it builds

Each claim-free year usually increases your discount, up to a maximum set by the insurer.

What affects it

Claims where you were at fault usually reduce the discount
Some non-fault claims may not affect it, depending on circumstances and the insurer
Windscreen claims may be treated differently

Protection

Some insurers offer to protect the discount for an extra cost. This usually allows a limited number of claims without losing the discount, but your premium can still rise.

Transferring it

You can often transfer a no-claims discount to a new insurer with proof. Some insurers recognise experience as a named driver.

Deciding whether to claim

For small losses, compare the cost of repair with the potential increase in premiums.

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This is general insurance information, not legal, financial, or insurance advice. Coverage depends on your specific policy, insurer, and jurisdiction. Read your policy documents and speak with a licensed insurance agent or broker before making decisions.

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No-Claims Discounts Explained

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