what is no claims discount

A no claims discount (NCD), also known as a no claims bonus, is a discount that can be applied to a car insurance policy based on the number of consecutive years the policyholder has gone without making any claims. Every full year of no claims you earn gives you a discount on your car insurance policy, and the exact amount changes depending on the insurance company. The more NCD you have, the more your discount increases. The discount offered through the NCD varies from insurer to insurer, but it can save you up to 60% on rates after five years. The NCD discount is applied to your physical damage coverage, but it doesnt apply to third-party premiums. If you have a liability-only policy, you wont see a premium decrease. If you make a car insurance claim where your insurer pays out, youre likely to lose some or all of your no-claims bonus. However, some insurers offer a protected no-claims bonus, which allows you to make a certain number of claims without losing your discount. The amount of time that a no claims bonus is valid for varies between insurers, but it is usually valid for two to three years after a policy ends.