What Is a No-Claims Discount on Car Insurance?

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Picking a car insurance policy to purchase often feels like choosing between a thousand different discounts. Every car insurance company offers discounts as a way to try and gain or keep your business, and choosing the right insurance for you is often a matter of finding the right discounts and applying them.
One common discount is called a no-claims discount, which is often referred to as a good driver discount. No-claims discounts are fairly common, and most car insurance providers offer them in some form or fashion. But not all car insurance discounts are straightforward, so it’s important to know exactly what it is you’re getting with a specific discount. Here’s everything you need to know about good driver discounts.

What is a no-claims discount?

A no-claims discount is exactly what it sounds like: a discount you receive for not having filed a claim. Car insurance companies make money when you’re not filing claims, and want to reward you for that behavior. When you do file a claim, they lose money because they’re likely to have to send a payment your way to cover the damage for your car. So, a no-claims discount is essentially a car company rewarding you for being a good driver, and thus making them more money.
Many no-claims discounts will reward you for having gone a certain amount of time without filing a claim, even if you have filed some in the past.

Is a no-claims discount available when applying for car insurance?

Yes. A no-claims discount usually follows you from insurer to insurer. It’s not like a loyalty discount where you need to stay with one company. If you have never filed a claim, or haven’t filed one in a long time, you’ll be eligible for a no-claims discount with any company that offers it.

Which companies offer no-claims discounts with their car insurance?

Almost all car insurance companies offer no-claims discounts, though it isn’t always advertised. Sometimes it’s just built into your rate. All of the major car insurance companies have some version of a no-claims discount.

Do all no-claims discounts work the same way?

No. Different companies have different ways of using no-claims discounts. For instance, some companies charge you a higher premium and give you better coverage, then refund you every few months that you don’t file a claim. Many companies offer the discount as a reduced rate, while others offer it as a payout reward.

Do no-claims discounts grow with time?

Yes. At most car insurance companies, the size of your no-claims discount will grow the longer you go without filing a claim. Keep driving safely, and you’ll keep saving more and more money.

Do all filed claims remove your no-claims discount?

Not all claims that you file count against your no-claims discount. If you are not at fault in an accident, and all of the damage is covered by the at-fault party’s insurer, it usually won’t impact your no-claims discount, because your insurance company didn’t need to get involved beyond the initial claim.
Furthermore, if you have a comprehensive car insurance plan and are not at fault in an accident involving an uninsured driver, it shouldn’t impact your no-claims discount. No-claims discounts also aren’t impacted by small claims, such as roadside assistance.

Should you avoid filing a claim to keep a no-claims discount?

It can sometimes save you money to not file a claim. In cases of minor repair, it may be cheaper to pay out of pocket and not lose your discount. This all depends on your insurance company, the cost of the repair, the cost of the discount, and the size of your deductible. It’s worth doing the math.
A no-claims discount can be a great way for many drivers to save money on their car insurance. If you haven’t been in an accident in some time, it might be a discount you can take advantage of.

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