How long does a no claims discount last without renewing cover?

A no claims discount is a reduction in your car insurance premium. Building up your no claims each year can lead to big reductions in what you pay, but what happens to it if you sell your car or decide to stop driving for a while?

Here, we take a look at how long your no claims bonus might last without renewing car cover.

How do no claims discounts work?

For each year you drive without making a claim on your insurance, you earn a no claims discount (NCD). It’s also known as a no claims bonus (NCB).

The discount is a percentage off your car insurance premium. The level of discount varies by insurer, but it typically ranges from 30% for one year’s NCD up to around 75% after five or more years. Some insurers offer even greater discounts so it’s worth comparing policies to see what’s available as it can help you make considerable savings.

No claims discounts can only be earned after a 12-month period. So, if you decide to cancel your policy after a few months, you won’t earn an NCD from that policy.

And remember, protecting your NCD doesn't mean your premium won't rise.

Can I earn a no claims bonus with temporary car insurance?

Generally, you won’t be able to earn a no claims bonus or discount with temporary car insurance. No claims discounts are only given after 12-months of claim free driving.

How long does a no claims bonus last without renewing car insurance?

If you don’t renew your policy, your no claims discount will usually be valid for two years from the date your existing policy expires.

Some insurers may be willing to honour some or all of the no claims you’ve built up even after two years. In most cases, it will often depend on how long it’s been since you last took out car insurance and how many years’ worth of no claims you’ve built up.

If you go back to the last insurer you had a policy with, you might find they’re more willing to honour your previous NCD. But again, this is more likely to happen the less time that has elapsed.

Do no claims discounts expire?

If you take out car insurance every year, your no claims discount doesn’t expire. It’ll simply continue to increase every 12-months until you reach the maximum discount offered by that particular insurer.

If you don’t need car insurance anymore, for example if you stop driving for a while or sell your car, your no claims will lapse rather than expire.

Can a named driver earn a no claims bonus?

Typically, named drivers don’t earn a no claims discount. The discount is earned by the policyholder or main driver only and cannot normally be transferred.

You may find some insurers willing to offer an NCD to drivers named on a policy taken out with them. If this is the case, it will usually mean taking out a policy with that same insurer, it’s highly unlikely that the named driver could take the NCD and use it with another provider.

Can I transfer my NCD to another person?

As a broad rule, no claims discounts cannot be transferred. This is simply because the no claims has been built up by an individual, based on their driving habits.

That said, some insurers will let you transfer your no claims discount to your spouse. This usually only applies to married couples or couples in a civil partnership. If you’re co-habiting, you usually won’t be able to transfer your NCD.

Can I transfer a company car no claims to a personal car?

You might be able to transfer your no claims earned from driving a company car, but it will be up to each insurer. If you can, then you’ll usually need to meet certain criteria, for example, you must have been the sole driver of the car. Insurers will also need proof of this and will normally ask for documentation from your employer.

If you shared the car or it was a pool car only used for work purposes, it’s unlikely that you’ll be able to use any NCD earned through using your company car.

Do I have to stay with the same insurer to redeem my no claims discount?

No, your no claims discount stays with you, and you can take it to different insurers when your car insurance is up for renewal.

Just be aware that insurers apply different discounts and five years’ worth of no claims might be worth 65% with one insurer but 70% with another. Not only that, bigger percentage discounts don’t always mean cheaper policies and it will depend on how much your premium costs in the first place.

Does classic car insurance offer a no claims discount?

You won’t normally earn a no claims discount with classic car insurance. This is because classic car policies are usually focused on the value of the car and its age. Classic cars are also generally driven less, so aren’t always an accurate reflection of everyday driving habits.

Find out how to protect your no claims and if it’s worth it

Building up your no claims after several years can cut insurance premiums significantly. With that in mind, many drivers pay a small fee to protect their NCD in case they need to make a claim. This enables them to keep the same level of discount at renewal.

Protecting your no claims isn’t the right choice for everyone, and it often comes down to the number of years you’ve been driving. To help you work out whether it’s something worth doing, we’ve put together a guide to NCD protection.

You can also search for car insurance right here, simply enter your details to compare policies that suit you and your budget.