A No Claims Discount (NCD), sometimes called a No Claims Bonus, is a reward for driving without making a claim on your car insurance. Generally, the longer you go without making a claim, the bigger your discount could become.
For many drivers, a No Claims Discount can help reduce the cost of their insurance when it’s time to renew.
How does it work?
Each claim-free year you build up is usually recorded as an additional year of No Claims Discount.
For example:
- 1 claim-free year = 1 year NCD
- 2 claim-free years = 2 years NCD
- 5 claim-free years = 5 years NCD
In most cases, the more years of NCD you have, the greater the discount you may receive on your insurance premium
Is there a maximum number of years?
Yes. Each insurer sets its own maximum level of No Claims Discount.
For example, one insurer may recognise up to 5 years NCD, while another may accept up to 9 years or more. Once you’ve reached an insurer’s maximum level, additional claim-free years may not lead to any further reduction in your premium.
For policies arranged through Carrot Insurance Services, we recognise up to five years’ NCD. If you’ve built up more than five years, you can still get a quote, but your discount will be based on a maximum of five years.
When does a claim affect my No Claims Discount?
Making a claim doesn’t always mean you’ll lose your NCD. If the costs are recovered from the other party, your NCD can remain unchanged. If your policy renews while the claim is still being resolved, your NCD may be reduced temporarily, but it can be reviewed once the claim is settled. This will depend on the circumstances of the claim and the terms of your policy.
Why is NCD important?
As you build up claim-free years, your NCD may help reduce the cost of your insurance over time.
You should always report an accident or incident as soon as possible, regardless of who was at fault or whether you intend to make a claim. Simply reporting an incident does not necessarily mean your NCD will be affected.
At Carrot, safe driving can benefit you in more than one way. Alongside building a No Claims Discount, drivers with a good Driving Score may also have the opportunity to earn a discount at renewal.
That means safer driving habits today could help you save money in the future.
Ready to get a quote?
Whether you’re building your first year of No Claims Discount or already have claim-free driving experience, Carrot can help you get on the road with confidence.
Get a quote with Carrot today.