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No claims bonuses and no claims discounts

Your insurance claims history, that is how many claims you have made on your policy, affects the price of your motor insurance premium.

If you have a claim-free record your insurer will reward you with a no claims discount, also known as a no claims bonus, which reduces the price of your premium.

No claims bonuses differ from insurer to insurer. This is a very competitive area for insurance companies so it is worth shopping around for the best deal.

How it works

Your no claims discount builds up with each claim-free year, so the longer you go claim-free the bigger your discount will be. No claims discounts vary from insurer to insurer, but they can be as much as 30% for one claim-free year and 60% for five claim-free years.

Some insurers offer protected discount policies which allow customers to make a certain number of claims over a specified period of time without affecting their no claims discount.

Protected discount policyholders are usually allowed to make two claims over a three to five-year period without losing their no claims discount. The price of your premium or your excess (the first part of any claim you must pay) may be affected if you make a claim on a protected discount policy.

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Last updated 19/04/2013