‘I’m currently not driving. Will I lose my no claims bonus?’
Drivers build up a no claims bonus (NCB) each year they’re insured and don’t make a claim. The more claim-free years you build up, the larger no claims discount (NCD) you’ll receive on your annual insurance premium. (See YourMoney.com’s No claims bonus and no claims discount: what’s the difference? for more information.)
Estimates suggest someone with five years NCB could save between 40% and 60% on their policy.
But for someone who has temporarily stopped driving or is using another vehicle as a named driver, what happens to their NCB?
You need a full 12 months of claims-free driving to increase your NCB so if for example you had nine year’s NCB and then didn’t drive for a year, you would still only have nine years NCB on the policy.
If you haven’t driven for two years, you’ll probably struggle to get an insurer to honour any previous NCB, though you may have more success if you talk to the same insurer you were last covered by, according to Keven Pratt, consumer affairs expert at MoneySuperMarket.com. “They may reduce your NCD rather than make you start from scratch again,” he says.
Comparethemarket.com says most insurers won’t accept a gap of more than two years, but there may be some exceptions which is why customers should always check with their provider.
If you’ve built up your NCB but stopped driving your own car temporarily while being a named driver on someone else’s policy (rather than the main driver), this doesn’t tend to count towards your own NCB.
Comparethemarket.com says some (not many) insurers will let you build up NCB as a named driver, but this will be separate to the NCB you built up as a main driver, and it may not always be recognised by other insurers.
You can pay an additional premium to protect your NCB, enabling you to make a claim or claims in a stated period without losing your discount. But you can only protect a ‘live’ discount so you need to be driving and insured to have the option of protecting your NCB.
For those who’ve taken a break from driving and can’t recall how many year’s NCB have been accrued, the best place to start is with your previous insurer or broker who should have a record.