If you’ve been driving carefully and building up your no-claims bonus for years, you can take advantage of the discount even if you switch to another insurance provider. But, to do that you’ll need to be able to prove your no-claims bonus to your new provider.
In this guide, we’ll explain how exactly a no-claims bonus work, how to get NCD proof, and what you can do to protect your no-claims bonus.
Let’s dive in.
How does a no-claims bonus work?
A no-claims bonus is a discount on your insurance premiums you’ll get as a reward for every year you’ve spent driving without making any claim against your insurance policy.
Along with your age, driving history and vehicle model, the no-claims bonus is one of the main factors determining your premiums’ price.
Your no-claims bonus builds up with each year you drive without claiming, thus, the longer you go claim-free, the bigger discount you’ll see on your insurance premiums.
Although discount rates will differ between providers, according to the Association of British Insurers, one claim-free year could slash as much as 30% of your premium, rising to 60% if you spent five consecutive years without making any claim.
However, the no-claims bonus doesn’t last forever. It is usually valid for two years after your car insurance comes to an end. Therefore, if you spent more than two years off the road without insurance, your no-claims bonus will be wiped out, and you’ll have to start building it from scratch.
How to get proof of a no-claims bonus?
If you decide to switch to a different insurance provider for a better price, you can transfer your existing no-claims bonus and further lower the costs of your premiums.
However, if you state you have a no-claims bonus in your applications, your new insurer will probably ask you for some proof to ensure that you’re being truthful about how many years you’ve spent without claiming.
Some insurers will ask your old provider for proof of your no-claims discount, or they might check the Motor Insurance Bureau’s no-claims discount database to get it, but in most cases, you’ll need to send them the proof yourself.
Depending on the insurer, you’ll be asked to provide proof of NCD within one to three weeks of your policy’s start.
Please do so to avoid your new policy being cancelled or your premiums getting significantly higher.
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Generally, there are three main ways to get your no-claims bonus proof:
- Car insurance renewal letter – When your policy is near its renewal date, your insurer will send you a renewal letter that, apart from stating the cost of your renewed policy, will also include how many years of no-claims bonus you have.
- Car insurance cancellation documents – The documents you’ll get when you cancel your old policy will usually include your NCD proof.
- Confirmation letter – If neither of these documents has the details you need, you can contact your old provider and ask them to send you a letter confirming your no-claims bonus.
Note that different insurers will accept proof in different ways, so before sending yours, you should check with your provider what details they need to see and whether you should send the document by email, post or upload it to their website.
Also, some of them will request an original copy of your no-claim discount proof to ensure that it isn’t fake. In this case, make sure to save a copy for your own records before you send the original.
Once you’ve sent the document, look out for an email or letter confirming that your car insurance provider has received the requested no-claims proof. If you don’t get one, follow up with a call to see what’s happened.
How to protect your no-claims discount?
Most insurance providers offer no-claims bonus protection policies that can be added to standard policies for an additional cost. These policies allow drivers to make a certain number of claims without affecting their no-claims bonus.
If you’ve been building up your no-claims discount for years, getting NCD protection is undoubtedly worth considering. This way, if you need to claim for an accident where you were at fault, your no-claims bonus will remain intact, and you won’t need to start building it again from scratch.
This, however, doesn’t necessarily mean that the cost of your premiums won’t be affected.
Any claims you make will still stay on your record, so it is likely that your premiums will go up even with your NCD intact.
Did you know that fraudulent motor claims worth £3.3 million are detected every day?
Bottom line
The no-claims bonus plays a vital role in calculating your premiums, so when you’re switching providers, you would definitely want to take it with you. However, you won’t be able to unless you have no-claims proof you can show to your new provider.
Luckily, there are several ways how to get NCD proof – you can use your car insurance renewal paperwork or your cancellation letter. If you can’t find your proof there, you can always get in touch with your old provider and ask them to send proof of your existing no-claims bonus.
My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.