No Claim Bonus for Auto Insurance [Expert Guide]

A No Claims Bonus for auto insurance can save you up to 60% on rates after five years. However, even not-at-fault car accidents can eliminate the no claims discount.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Apr 29, 2022

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Things to remember...

  • Providers offer a myriad of auto insurance discounts to different drivers
  • If you’re a safe driver, you may qualify for a Good Driver or Safe Driver Discount through your insurance carrier
  • Another way to save money on your policy is to go an extended period without filing any type of insurance claim
  • A No Claims Bonus for auto insurance offers you a discount off of your physical damage premium for not presenting any claims
  • The Accident-Free Discount is different from a No Claim Car Insurance Bonus because it applies strictly to accidents and not claims
  • It is in your interest to pay for your own damage if you want to keep your No Claim Bonus for auto insurance and the damage is minor

Auto insurance carriers are known to raise rates on a regular basis. As administrative costs rise and the cost to settle claims go up, insurance companies file new, higher rates with the state. If you have car insurance without a no claims bonus and are a safe driver, you’re probably paying more than you should.

Since auto insurance rates aren’t grandfathered in, existing clients begin to see their personal rates go up as soon as their next auto insurance renewal comes.

While auto insurance prices do tend to go up, your premiums could actually start to drop if you do business with one of the many carriers that offers a No Claims Bonus for car insurance. This is one of the many auto insurance discounts and credits available.

Most people understand that a No Claims Bonus (NCB) is given to individuals who are claims-free but there’s a lot more to the policy provision than that.

Below is a guide to No Claims Bonus for car insurance and above is our free quote tool. Just enter your ZIP and start comparing rates today.

What is a No Claims Bonus?

A no-claim bonus is essentially a discount that’s applied to qualifying policies when no claims are presented.

To be eligible for the discount, you can’t have filed a claim against your own insurance and there can’t be any third-party claims presented by others as well.

New applicants for coverage won’t qualify for the NCB during their first term.

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How much does a No Claims Bonus save you?

If you do have first-party damage on your policy, you’ll notice your rates drop. The bonus tends to grow over time.

If you are claims-free for one year, you may see an initial 20 percent discount off of the damage component of your premiums.

The table below shows the insurers who provide this discount with known percentages.

Companies That Provide Claim-Free Discount and Percentage of Discount
CompanyClaim Free Discount %
Safe Auto10%
State Farm15%
The Hanover15%
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Over the years, the discount will grow. At the end of five years, the NCB discount could be as high as 60 percent.


What coverage is the No Claims Bonus applied to?

It’d be nice if the discount was applied to your entire policy premium but that’s not the case. Whenever you qualify for the bonus, you’ll see the premiums on your physical damage coverage drop.

Unfortunately, the savings doesn’t apply to third-party premiums. If you have a liability-only policy, you won’t see a premium decrease.

What is a third-party car insurance claim?

If you’re not familiar with terms that are used to classify claims it’s time that you learn the difference. Legal experts outline the difference between the two. You have control over whether or not you file a first-party claim but third-party claims are beyond your control.

They are filed by others involved in accidents with you. If it’s a legitimate claim, damages will be paid out under Bodily Injury and Property Damage Liability.

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When will the no-claim discount be applied?

You won’t get the NCB from a company with the NCB provision the first time that you apply for coverage.

You will have to go one-year with the insurer without having any claims before you’ll be eligible. Getting the bonus at your renewal is one of the few reasons why you should stay with your existing insurer. That’s how you can get the best car insurance after one year with no claims.

If you want to get cheap car insurance with 3 years of no claims, you may be able to get a fairly good no claims discount.

Will you lose your discount if you have a non-fault accident?

Having a not at fault accident usually doesn’t affect your premiums. Your rates won’t go up if someone hits your car and you can’t be held responsible for damages sustained by others.

But do you lose your no claims bonus if it’s not your fault? Unfortunately, the fact that the accident is not your fault doesn’t matter. If a claim is filed against your policy no matter the size or the fault allocation, you will lose your No Claims Bonus. And if you have car insurance without NCD, you may see a big increase in your rates.

Do insurance companies check no claims bonus eligibility? It’s best to report an accident up-front, even if you aren’t at fault, because they will find out.

Is a No Claims Bonus the same thing as an Accident-Free Discount?

While No Claims Bonuses and Accident-Free Discounts are similar, they are not exactly the same thing.

While the accident-free discount is strict enough on its own, the No Claims Bonus has even stricter guidelines.

Not only do you have to be accident-free, you can’t file any type of other claims against the policy for the savings.

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Can you still get a Good Driver Discount?

If you don’t qualify for the No Claims Bonus, it’s still possible to receive other discounts.

This video from Geico talks a little about the Good Driver discount.

While filing a claim can affect your rates when it’s classified as a chargeable, loss, you could still meet the definition of a ‘Good Driver’ or ‘Safer Driver’ in most states with one at-fault accident in the last three years.

Will you get a No Claims Bonus if you trade-in your car?

The NCB is issued by the insurance carrier to an insured and not to a specific vehicle. If you and drivers on your policy haven’t filed any claims, you’ll see the premium on the vehicle go down.

While insurance does follow the car, you can still take advantage of the savings if you get a new car. All you have to do is change the car on the policy and the discount will remain on the plan.

What happens to your No Claims Bonus if you have a single-car accident?

What do you do after an auto accident? If you’re involved in a single-car accident or your car was damaged while it was parked, you may want to rethink your decision to pick up the phone and file a claim.

The California Department of Insurance notes that you should immediately call 911 if there are injuries, call the police, and obtain all relevant information right after the accident.

It’s nice to have the coverage there if the damage is severe, but asking your insurer to pay for your physical damage after a minor loss could cost you more in the long run.

It’s best that you get repair estimates before you make any claims decisions.

Also, look over your deductible and then ask your agent to give you a quote of what your premiums would look like without the claims-free savings and will a possible surcharge for the claim that you file.

As you’ll see, paying out of pocket could be a better option in terms of long-term savings.

It’s always nice to be awarded for your good driving. Not only can you get a discount for being a good driver, you can also get a discount for handling claims on your own.

As you’re shopping around for low-cost auto insurance, be sure to ask if carriers have a No Claims Bonus feature or something similar to it.

Then, get instant online quotes to compare and choose the best option for the long term.

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Frequently Asked Questions

Check out these extra FAQs below about the no claims bonus with auto insurance.

Do I have a no claims bonus as a named driver?

Unfortunately, you won’t be able to build up a no-claims discount if you’re a named driver. Only the primary driver of the vehicle can get this discount and build up the no-claims period.

If Your Car Insurance Expired, Your No Claims Bonus May Be Invalid

Though it changes based upon which insurer you have, you may lose your discount if your auto insurance is expired for too long. Always check with your insurer if you know that you’ll be uninsured for a while.

Can you get a fleet insurance no claims bonus?

This depends upon the insurer, but most traditional insurers will not provide a no claims bonus for fleet vehicles.

Can you buy no claims bonus insurance? Don’t miss out on our free comparison tool below. Just enter your ZIP code and start comparing rates now for no claims bonus car insurance now.

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