Insurance
What Is a No-Claim Bonus (NCB) and How to Keep It
HomeFin · 18 November 2025 · 5 min read
Quick answer
A no-claim bonus rewards claim-free years — cutting your motor premium (up to ~50% after five years) or boosting your health cover for free. One claim usually resets it, so for small repairs, paying out of pocket to preserve a big NCB is often cheaper. Consider “NCB protection” add-ons.
The no-claim bonus is one of insurance's quiet rewards — a benefit for not using your policy. Understanding it can save you real money and change when it's worth making a claim at all.
What NCB is
A no-claim bonus (NCB) is a reward for going a policy year without claiming. It shows up in two forms:
- Motor insurance: a discount on your next premium, growing with each claim-free year.
- Health insurance: a free increase in your sum insured (cover) each claim-free year, sometimes called a cumulative or no-claim bonus.
How much it's worth
In motor insurance, NCB typically starts at 20% off the own-damage premium after one claim-free year and climbs to around 50% after five — a substantial saving. In health insurance, it can add a meaningful percentage to your cover annually, boosting your protection at no extra cost. Over years, an accumulated NCB is genuinely valuable.
One claim can wipe it out
The catch: a single claim usually resets or sharply reduces your NCB. So the year after claiming, you lose the accumulated discount or bonus. This is why the decision to claim isn't always obvious.
When not to claim
For a small repair or expense, it can be cheaper to pay out of pocket and keep your NCB than to claim and lose a large accumulated bonus. Do the simple maths: compare the small amount you'd claim against the future premium increase or lost bonus. Often, absorbing a minor cost yourself is the smarter move.
Protect your bonus
Many insurers offer an NCB protection add-on that lets you make a claim (or a limited number) without losing your accumulated bonus. If you've built up a large NCB, this small add-on can be well worth it.
Factor it into your insurance strategy
The NCB is one more reason to insure adequately but claim wisely — reserving claims for costs large enough to justify losing the bonus. Keep your policies active and renewals on time (HomeFin tracks premiums as recurring dues), so your NCB keeps accumulating year after year. Small discipline, real long-term savings. See also common insurance mistakes.
Frequently asked questions
What is a no-claim bonus?
A no-claim bonus (NCB) rewards you for not making a claim in a policy year — usually by reducing your next premium (in motor insurance) or increasing your cover for free (in health insurance). It grows with each claim-free year up to a cap.
How much can a no-claim bonus save?
In motor insurance, NCB can cut the own-damage premium by 20% after the first claim-free year, rising to around 50% after five. In health insurance, it can add a significant percentage to your sum insured each year.
Do I lose my no-claim bonus if I make a claim?
Usually yes — one claim typically resets or reduces the NCB. Some insurers offer 'NCB protection' as an add-on that preserves it even after a claim.
Should I avoid small claims to keep my NCB?
Often yes. For small repairs, paying out of pocket to preserve a large accumulated NCB can be cheaper overall than claiming and losing the bonus. Do the maths before claiming.
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