A no claim discount can save money on your car insurance costs. So, what is it and how does it work?
- Find out how a no claim discount (NCD) can save you money
- Even after just one year of claim-free driving, you can get discount
- In certain circumstances you can make a claim and it won't affect your no claim discount
What's a no claim discount?A no claim discount is a reduction in the cost of your car insurance if you don't make a claim. You usually earn one year of no claim discount for every claim-free year of motoring. So, if you don't make a claim for five years, you'll have five years of no claim discount applied to the basic cost of your car insurance.
Is a no claim discount the same as a no claims bonus?In a nutshell – yes. No claims bonus, no claims discount and no claim discounts are all the same thing. Some insurance companies call it a bonus, but it actually acts as a discount on your insurance premium, which is why we call it a no claim discount.
What do I need to know about my no claim discount?
- It can save you money. Even after just one year of claim-free driving, you can earn a discount of up to 30 per cent on next year's car insurance costs. After five years this could be as much as 60 per cent.
- It builds up over time. The longer you go without making a claim, the more your discount will be. With LV=, you can build up to nine years of no claim discount.
- You can take a break. Even if you cancel your car insurance, you can reinstate your no claim discount when you insure a car again. With LV=, as long as the date your last policy ended is within two years of your new policy starting we can honour any no claim discount you previously earned.
- It's just for you. You can only earn a no claim discount if you're the policyholder named on the car insurance, or if you are an NCD holder on our multi car policy. Plus you can get a 5 per cent multi car discount too.
- You can take it with you. When you buy a new car or change insurance provider, you can take your no claim discount with you.
What happens when I make a claim?The discount applies because you haven't made a claim from one year to another. So, if you make a claim, and the accident was your fault, you'll lose some or all of your discount.
For example, with LV= if you have six years of no claim discount and you make an 'at fault' claim, the next time you renew your policy we'll apply a discount equivalent to three years of no claims, rather than your previous six years.
Can I make a claim and not lose my no claim discount?Yes, in certain circumstances you can make a claim and it won't affect your no claim discount.
If you're involved in an accident that wasn't your fault, and we can recover the cost of repairs to your car from the liable driver's insurance, then your no claim discount won't be affected.
If you have comprehensive car insurance and you're in an accident with an uninsured driver that wasn't your fault, then you can keep your no claim discount.
You also won't lose your no claim discount if you need to only make a claim for emergency medical treatment, windscreen damage, breakdown or motor legal expenses.
In certain circumstances you can make a claim and it won't affect your no claim discount.
What's protected or guaranteed no claim discount?For an additional cost, you can choose to protect your no claim discount even if you need to make a claim. So if you have an accident that was your fault and you claim on your car insurance, you can keep your no claim discount intact.
Can I transfer my no claim discount to another car or insurer?
Yes. If you change your car or your insurance provider, you can take your no claim discount with you. You'll need to provide proof of how many years of discount you've built up to your new provider so they can apply the discount for you.
What if I haven’t had the chance to build up my NCD?
We understand that not everyone has had the chance to build up NCD despite being a safe driver. Perhaps you’ve been on someone else’s policy or simply haven’t driven in a few years, either way, you may want to consider LV= Flow. Flow is simplifying insurance by pricing your policy based on your driving history and individual circumstances to give you our best possible price, without asking for proof of NCD. As Flow doesn’t take NCD into account, you can’t earn NCD with Flow either, but we can give you written confirmation of any claim free years you’ve had with Flow (we can’t guarantee that another insurer will accept this as proof of NCD though). If this sounds like it would suit you, find out more about Flow by LV=.
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