What is a no claims discount?

A No Claims Discount (NCD) can play an important part in lowering your annual insurance premiums. If you do not make a claim on your Car Insurance, then your insurer is not required to pay out. By default, this implies you are a safer driver and therefore cheaper to cover. As the name suggests, drivers who make no claims are eligible for a discount on their yearly premiums, and with RAC Car Insurance this can be anywhere up to 70%.

No Claims Discount explained

There are a number of factors that can have an impact on your No Claims Discount. For example, if you make a claim then your discount will be reduced and in some cases removed altogether. You can choose to pay to protect your discount - this is known as a Protected No Claims Discount - and means that you can keep your discount, even in the event of making a claim.

Another important factor is the ability of your insurer to recover the costs from another party. Whether your car was stolen, involved in a hit and run, or accidently skids on a slippery road, if a claim is made and the insurer is not able to recover the cost from another party, then you will lose some, if not all, of your no claims discount.

Households with two cars will need to have two separate NCD, one for each car. This is because drivers are not allowed to share a discount that has been earned on one car and then try and split it between two separate vehicles. However, if you buy a new car then it is possible for your discount to be transferred. Even though you can’t share your no claims discount between your cars, you are able to take your discount with you if you choose to switch insurers. Though the new policy and NCD features may not be identical, any claim history should still lead to a discount with your new insurer.

RAC Car insurance

Get up to 70% off RAC Car Insurance with 9+ years no claims discount

RAC Insurance is a trading name of RAC Financial Services Limited. Registered in England and Wales No. 5171817. Registered office: RAC House, Brockhurst Crescent, Walsall, WS5 4AW. RAC Car Insurance and RAC Home Insurance are arranged and administered by BISL Limited, which is an independent intermediary. Registered in England no. 3231094. Registered office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS. Both companies are authorised and regulated by the Financial Conduct Authority.