No-claims bonus

A no-claims bonus is a reduction in the cost of an insurance policy granted to the policy holder for not making a claim in the previous period of cover (typically one or more years).

No-claims bonuses typically apply to car insurance as the number of accidents someone is involved in is a useful measure of the risk to which the insurer is actually exposed.

No-claims bonuses can be protected, meaning a single (or even a few) incidents will not remove a no-claims bonus that has been built up over a number of years – although doing this adds to the cost of a policy.

No-claims bonuses can have a massive impact on the cost of car insurance, removing as much as 70 per cent of the cost of a premium.

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