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What is a No Claims Discount?

August 17, 2021
3 min read
Software Engineer

The world of insurance is full of confusing phrases and old-fashioned words. But don’t worry, we’re here to break down the jargon for you and make insurance simple. In this article, we’re focusing on a phrase you’ve probably come across a lot: No Claims Discount (otherwise known as No Claims Bonus). So, here goes...

What’s the difference between a No Claims Discount and a No Claims Bonus? 

In UK car insurance, the terms No Claims Discount (NCD) and No Claims Bonus (NCB) essentially mean the same thing. If you don’t make a claim on your car insurance, you’ll earn an NCD or an NCB which usually gets you a discount on your premium. 

The more years you don’t claim on your insurance, the more NCD you’ll earn. 

Just so you know, we stick to the term NCD at Marshmallow. 

How does No Claims Discount work at Marshmallow?

No Claims Discount can be confusing, and it varies from insurer to insurer. So, we’ve answered some FAQs for you. 

  1. How much money does my No Claims Discount save me at Marshmallow? 

The number of years NCD you gain will affect your discount. It works out as the following: 

1 year = 16% discount
2 years = 23% discount
3 years = 26% discount
4 years = 29% discount
5 years = 31% discount
6 years = 33% discount
7 years = 34% discount
8 years = 35% discount
9+ years = 36% discount

After 10 years, you will stop gaining any extra years of NCD. 

  1. I’ve been driving for years outside of the UK, how does that affect my No Claims Discount? 

At Marshmallow, we want all of our drivers, whether they’re from the UK or not, to get maximum savings. That’s why we recognise your history of claim-free driving in the UK and outside of the UK. So, your proof of claim-free driving doesn’t have to be in NCD form. We accept the NCD and NCB systems, and their various international equivalents. 

If you're an expat or migrant and want to know more about our fairer and more affordable cover designed with you in mind, head over to our

  1. Does my No Claims Discount take my motorbike into account too? 

Your NCD must be for claim-free driving using a car. Sadly, we cannot accept claim-free driving on motorbikes or some other vehicles.

  1. I stopped driving for a few years, does that impact my No Claims Discount? 

If there was a large gap between the time when you earned your NCD and now, we may not be able to accept your NCD. We can’t accept NCDs that are older than 3 years.

  1. How can I prove my claim-free driving?

Whether it’s NCD, NCB or some other variation, we might ask for proof of your claim-free driving. This proof must come from your previous insurance company. A lot of our customers send in the renewal notice from their existing insurer.

The information we’ll need from you includes:

  • Number of years NCD/NCB ratio (or an international equivalent)
  • Details of any claim
  • Policy expiry date
  • The contact details of your previous insurer including the telephone number, email address, fax number, and postal address

If you can’t prove your NCD or an international equivalent, you'll lose the discount you’ve gained for claim-free driving. 

We know NCDs can be confusing. If you’ve still got some unanswered questions, feel free to contact us online or on our app. 

If you’re an international driver, looking to transfer your international No Claims Discount to the UK, we’re the insurer for you! Get a quote here.

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