No Claims Discount & No Claims Bonus Explained

Aviva Car Insurance

The No Claims Discount (NCD), or No Claims Bonus (NCB), is a common feature in car insurance. Simply put, it encourages safer driving behaviour. It’s a discount that car insurance customers receive if they haven’t made a claim for a set period of time – starting from 1 year.

No Claims Bonus aka No Claims Discount – two mini cars in hand

Insurers like to reward customers for proving that they’re less of a risk, and the NCD is one way to reward conscientious and safe driving behaviour.

How does No Claims Discount work?

The way it usually works, is that you’re offered a discount on the cost of your car insurance for every consecutive year you hold a car insurance policy in your own name without making a claim. The longer you hold a car insurance policy in your own name without a claim, the less of a risk you are and the bigger the discount is likely to be.

How long does No Claims Discount last?

Your No Claims Discount (NCD) will be valid in Ireland for 2 years after the expiration of your last policy (assuming that you’ve not been involved in an accident/claim since its expiration while driving under another policy – remember this would also include driving a car under a car rental policy).

Can I use my No Claims Discount on two policies?

No, if you have insured more than one car, you earn a No Claims Discount (NCD) on each car, separately. You must build up a No Claim Discount (NCD) on each vehicle you own separately and remember to always advise your insurer of who the main user of each car is as this is an important material fact that you must disclose.

What are the limitations?

Usually once you have had 5 consecutive years of claim free driving in your own name you will have reached the maximum discount available to you. This means that most insurance companies only take the last 5 years of consecutive driving in your own name into account when evaluating the discount value of your NCD.

The discount only applies to the policyholder, not to other named drivers on a car. Your NCD can only be used on one vehicle, so if you have two cars you cannot get this discount on a second insurance policy, unless the NCD on the second car has been earned in its own right separately. Trying to use the same NCD twice can have serious implications and is deemed as premium fraud, if you think this has occurred, you should notify your insurance company.

What happens if I change car or insurer?

Your NCD can be transferred if you change your car. If you move from one insurance company to another, the NCD will be used to verify the number of years claims free driving you have in your own name as a policyholder and is deemed to be transferred to the new insurer once the policy is taken out.

How do I know what NCD I am entitled to if I change insurer?

When an insurer or broker asks you about your No Claim Discount it is based on the actual number of consecutive claims free years driving in your own name as a policyholder.  Some insurers offer introductory NCDs for previous driving experience as a named driver on another policy.  However, these introductory NCDs are not transferrable and it is important to advise the new insurer of the years of driving claim free in your own name as an actual policyholder, so they can calculate the NCD they are prepared to offer you as part of their quote.

Equally if you have had a claim in which you were at fault in the past five years the new insurer will calculate the number of years NCD based on your claim free period of driving.

What's the biggest No Claims Discount I can get on my car insurance?

At Aviva, if you do not make a claim or no claims arise against you, in a five-year period of insurance then the discount awarded is 50%, this is the maximum No Claims Discount we offer.

How do you lose it?

This varies, but you will lose some or part of your NCD in the event that you make a claim or if someone makes a claim against you. The rate of this will depend on the individual circumstances of each claim.

Can I repay Aviva if I want to reinstate my No Claims Discount?

Yes, you can repay Aviva at a later stage if you wish and they will re instate your No Claims Discount.

Protecting your No Claims Discount

Our No Claims Discount protection allows you a certain number of incidents and claims without affecting your discount.

Many insurers offer you the chance to protect your NCD by adding a small fee to your premium. However, it is important to know that the protection of your NCB is not transferable between insurers. If you have a fully protected NCD with your current insurer but have made a claim, a new insurer will only grant you the benefit of a NCD which represents the period of claims free driving in your own name as a policyholder since the last accident or claim of which you were at fault.  The NCD is only protected by the insurer with whom you bought the protection from.

Protecting your NCD doesn’t mean that your premium won’t go up – there are many factors that affect the price of your car insurance – with this, you are paying to protect the no claims discount that you receive only.

We at Aviva offer 3 types of optional NCD protection:

  1. Step back No Claims Discount
    If you make a single claim or one arises against you during any period of insurance, we will reduce your No Claims Discount in the following intervals:
    - A 50% discount is reduced to 20%,
    - A 40% discount is reduced to 10%,
    - A 30% or less discount is reduced to 0%.
  2. Protected No Claims Discount
    With this kind of protection, you may make up to two unlimited claims in a three-year period without losing your No Claims Discount claims for window breakage, or up to two fire or theft claims will not be considered as a claim for this purpose.
  3. Protected No Claims Discount with Step back
    This type of protection is a combination of those outlined above. It allows you to make up to two unlimited claims in a three-year period without losing your No Claims Discount. We will not take account of claims for windscreen breakage or fire or theft for the purposes of this endorsement. For subsequent claims, no-claim discount step-back applies.

If you have any questions about the No Claims Discount and have a policy directly with Aviva contact us. If your policy is through a broker, please contact your broker.

Learn more about No Claims Discount and Aviva Car Insurance.

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1. Offer of 15% discount only applies to new car insurance policies bought online. Acceptance criteria, terms and conditions apply. Subject to a minimum premium of €310 for car insurance. Aviva reserves the right to withdraw, suspend or amend this offer or any of the terms and conditions there of at any time without prior notice.

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Aviva Direct Ireland Limited is regulated by the Central Bank of Ireland. A private company limited by shares. Registered in Ireland No 374895. Registered Office: Cherrywood Business Park, Dublin, Ireland, D18 W2P5.