A No Claims Discount (NCD) is the UK system for rewarding safe driving with money off your car or van insurance. You save an amount based on a percentage of the full price of the policy.
How does it work? It’s simple. Every year that you drive without making a claim on your insurance, you earn one year of No Claims Discount.
The more years you drive in a row without making a claim, the more money you get off. You can carry this forward from insurer to insurer.
Some countries have systems with different names that work pretty much the same way. And other places don’t have a system in place at all.
Is it the same as a No Claims Bonus?
Yes! In the UK, some insurers call this a No Claims Bonus (NCB). Same reward systems, different names. Confused yet? We don’t blame you.
At Marshmallow, we call it a No Claims Discount or NCD. We’ll also always explain that this refers to your claims-free driving experience.
Can I transfer a No Claims Discount from a different country?
For people who are new to the UK there’s often a catch. Lots of insurers in the UK only recognise years of claims-free driving experience gained in this country.
So if you’ve just moved to the UK? You'll likely miss out on a significant discount. And we don’t think that’s fair.
If you’re not a new driver, we don't treat you like one. At Marshmallow, we work with insurers all over the world to validate No Claims Discounts from any country. Including yours.
So as long as you’ve got proof from your previous insurer, all of your claims-free driving experience counts with us.
How do I get proof of a No Claims Discount?
A UK insurer will usually send you an official document via email when you cancel. Some insurers from other countries don't always send proof automatically. In this case, you should reach out to them to ask for proof.
The proof of your NCD should include:
- The number of No Claims Discount years you’ve gained
- Details of any claims
- Your policy start and end date
- The contact details of your previous insurer – including the phone number, email and address.
If your proof is in another language, the document does not need to be translated to English, but we might ask for it.
What happens to my No Claims Discount if I make a claim?
It depends. You earn a No Claims Discount for the number of years in a row that you go without making a claim on your insurance. If you claim, and your insurer can't recover their costs from someone else, you'll likely lose at least some of your No Claims Discount. And that will mean a significant price hike when you renew.
This could happen if you are responsible for the damage in an accident, or if someone steals your car.
If you only have a few years of claims-free experience under your belt you’ll probably lose all of your No Claims Discount. If you have lots of years, it may be that you only lose a portion. Really, it all depends on the insurer.
And if you’re not at fault for the claim? Good news. You usually get to keep all your years of No Claims Discount.
Can I protect my No Claims Discount?
For an additional fee, most insurers (including us) will allow you to buy No Claims Discount Protection. This means you’ll be able to keep some or all of your No Claims Discount if you make a claim.
Is it worth it? Well, that’s up to you. You’ll pay a bit more for No Claims Discount Protection and you might not need it. However, the extra fee will likely be cheaper than the increase to the price of your insurance should you lose your No Claims Discount.
There's often a limit on how many claims you can make within a certain timeframe. If you have No Claims Discount Protection at Marshmallow, you can claim twice within one year before your discount is impacted.
Another thing to note. At Marshmallow, your No Claims Discount Protection only applies to your years of claims-free experience in the UK. So if you have 6 years NCD from Nigeria and 2 years in the UK, only the UK years will be protected.
Can my car insurance price go up if I have a No Claims Discount?
Hard truth time. It’s always possible for your car insurance price to go up. Even if you have a respectable No Claims Discount. Even if it’s protected.
There’s many reasons why this might happen. Some affect the car insurance industry as a whole – like inflation. Read more about why it’s become more expensive here.
If you make a claim with a protected No Claims Discount, your policy price may still increase. This is because your No Claims Discount is a percentage of the overall price. So although you're still getting money off the overall cost to begin with is more expensive.
Can I use my No Claims Discount on two cars?
No, you can only use your No Claims Discount on one insurance policy at a time. So if you have two cars to insure? You’ll have to choose which one you want to use your No Claims Discount on. You’ll pay full price for the other one.
Do I keep my No Claims Discount if I stop driving for a few years?
Sadly, all good things must come to an end… eventually. It varies by insurer, but your claims-free driving record generally only lasts two or three years if you don’t have your own car insurance. At Marshmallow, we can accept a No Claims Discount that’s up to three years old.
This applies if you stop driving, or spend time as a named driver on another policy. Remember, you only build years of claims-free driving experience while you have your own car insurance policy.
Can named drivers build up a No Claims Discount?
Named drivers are additional people that you can add to your policy so they can legally drive your car. This covers them for all the same things you are - like damage to your own car and others'.
But while named drivers will have the same cover as you, they won’t build their own No Claims Discount. And if they cause damage that requires a claim, the main driver will need to make it – which could affect their own No Claims Discount.
