The No-Claims Bonus Myth: How Much Are You Really Saving?

The no-claims bonus (NCB) has a shiny reputation: drive all year without a claim and your renewal bill drops. Simple… until it isn’t. The truth is that your bonus sits on top of a moving price, is affected by the kind of claim you make, and can be “protected” without really protecting your wallet. Let’s decode what you’re actually getting—and how to make it work in your favor.

What a no-claims bonus really is (and isn’t)

Think of your premium as two layers:

The base price—what the insurer thinks your risk is today (your car, your address, your mileage, your driving history, market conditions).
The NCB—a loyalty-for-not-claiming discount applied to that base.

Here’s the catch most people miss: your base price can move up or down for reasons unrelated to your bonus. So you can keep the same NCB—or even “protect” it—and still pay more next year because the base moved.

Translation: An NCB doesn’t guarantee a cheaper renewal. It only guarantees the discount portion stays in place if you meet the rules.

Why the headline “saving” often overpromises

The base is a moving target. Repair costs rise, theft hotspots shift, weather gets nastier, and your car ages. The insurer updates the base before applying your NCB.
A clean year doesn’t erase other signals. A new speeding ticket, a change in parking, a different commute—those can outweigh the bonus.
New-customer pricing exists. Another insurer might offer a lower base even with a smaller or zero NCB. Shopping sometimes beats staying put with a big, familiar discount.

Bottom line: The size of your bonus means less than the price it’s being applied to.

“Protected NCB” is not the force field you think

NCB protection usually means you can have a limited number of claims without losing your discount tier. It does not promise your final price will hold steady. After a claim, the base can go up (because your risk just changed), and the protected bonus simply sits on a higher base.

It’s still useful—keeping your discount tier can avert a painful step back—but don’t mistake it for a price lock.

What actually counts as a claim (and what doesn’t)

Insurers separate events into buckets. The label matters more than the drama of the day.

Fault or “chargeable” claim: Your insurer pays out and can’t recover the money from someone else. Expect the base to react.
Non-fault claim: Another driver’s insurer pays, or your insurer recovers what it paid out. Your bonus may survive, but the base can still twitch because you were involved in an incident.
Glass-only, animal strike, weather: Often handled differently from collisions with other cars. In some policies they don’t reduce your bonus, in others they do.
Tiny payouts and courtesy-car claims: These can still count as claims. Always ask how the event will be coded before you proceed.

If it isn’t urgent, ask your insurer outright: “If I proceed, will this event reduce my bonus or change my step position?”

The step-back ladder: why one bad year hurts more than you’d think

Most NCBs aren’t simply on/off. They live on a ladder of steps. A single fault claim can drop you a few rungs at once. Protection can cap that drop, but only to the extent spelled out in your wording. Two claims in a short period can push you further down, even with protection.

Practical move: ask your insurer what your current step is, what one claim would do to it, and how long it takes to climb back.

Should you claim small damage or pay it yourself?

There isn’t a one-size-fits-all answer, but here’s a practical way to think about it:

If the repair is barely above your deductible and doesn’t involve anyone else, paying it yourself can be the cheaper, quieter path.
If another party is involved, there are injuries, or liability is unclear, open the claim. Trying to “handle it privately” can backfire badly if the story changes later.
When in doubt, ask about coding before you authorize repairs: “If I use the glass program, does it touch my bonus? If I claim a door ding through comprehensive, how is it recorded?”

You’re not being difficult; you’re being informed.

Switching insurers: does your bonus travel?

Usually, yes—but proof matters. Keep your latest renewal notice or an official NCB letter in your files, and make sure your gap in continuous insurance is explained (a period abroad, no car for a few months, and so on). A new insurer may honor your step, but will still set its own base. That’s why it can be cheaper to move even if the bonus percentage looks smaller.

Accident forgiveness vs. NCB protection (not the same)

They sound alike and sometimes appear together, but:

NCB protection preserves your discount tier after allowed claims.
Accident forgiveness tells the rating engine not to treat your first fault claim as a rating event at renewal.

Either feature can soften the blow of a bad year; neither promises a flat renewal bill.

Five ways to make your bonus work harder

Keep the boring habits. Park where thieves aren’t shopping. Use the steering lock. Keep both keys safe. These prevent the claims that burn steps.
Choose claim paths that don’t poison the well. If your policy treats glass separately, use the dedicated program. If you can direct repairs to a network shop without sacrificing quality, approvals are smoother and supplements are less dramatic.
Ask about coding before you commit. The same event can be logged in different ways; the code follows you longer than the emotion of the crash.
Shop the base, not the badge. Compare like-for-like cover at renewal and ask each insurer for the pre-bonus premium as well as the final price. You’ll see who’s really competitive.
Be honest about use. Rideshare, delivery, regular business use—get it written into the policy. A declined claim costs more than a higher but accurate base ever will.

A quick reality check with simple numbers

Imagine your base price jumps because repair costs rose in your area. You kept your NCB and even bought protection. Your discount is intact, but it’s being applied to a pricier starting point—so your renewal still climbs. That isn’t a broken promise; it’s how the math works. The antidote is to re-shop the base and make sure your cover still fits how you actually drive.

When paying for NCB protection is worth it

You’ve built up a long, clean history and don’t want a single mishap to knock you down several steps.
Your area has enough risk (hail, theft, crowded city streets) that a clean run every year isn’t realistic.
You value predictability: protection doesn’t freeze your price, but it can prevent a steep step-back that takes years to rebuild.

If your car is inexpensive and you’re comfortable self-funding small losses, you might skip it. If a surprise step-back would hurt, it earns its keep.

The one question to ask at every renewal

“Can you show me my price before and after the no-claims bonus, and what my step-back would be if I had a single fault claim next year?”

If the person on the phone can answer that clearly, you’re dealing with a straight shooter. If they can’t, shop around.

Bottom line

A no-claims bonus is a reward, not a guarantee. It trims the bill you would otherwise pay, but only after the insurer updates your base for the year ahead. Protecting the bonus preserves the discount, not the price. The smart play is to keep claim-worthy events to the truly claim-worthy, understand how an incident will be coded before you proceed, and re-shop the base—not just the shiny percentage—every renewal. Do that, and your bonus stops being a myth and starts being a useful lever in a bigger, clearer pricing picture.