This really is the crux of cheaper insurance, together with of course not claiming! Although you may have no claims bonus, the insurers will still load you if you have had claims go through in the claims declaration period.
Which is where the advice of really thinking carefully about opting for that protected no claims bonus. Is it really worth it? Read more here… In short though, it seems to vary a fair bit between insurers, since you will most likely be loaded a little by your insurer anyway (you have claimed so will pay the price for that) and insurers giving you a new quote will also load that up too, but see the Protected No Claims page for more information and several examples.
No Claims Bonus is, as the name suggests, a discount applied each year for not having made a claim. It may differ ever so slightly between insurers, but in general the discounts applied are as follows:
1 years NCB – 30%
2 years NCB – 40%
3 years NCB – 45 to 50%
4 years NCB – 50 to 60%
5 years NCB – 65%
You will note the table stops at 5 years, and although you may have 20 years of claim free insurance, usually only 5 years worth are taken into account. Some insurers don’t even show your full 20 years worth of NCB on the proof of NCB letter, stopping at just 5 years. Although it isn’t a big deal, it is nice to see a full 20 years on the letter!
Another important point to note with NCB is that, if, after 2 years consecutive of no insurance (i.e. if you are out of the country or carless etc) most if not all insurers will classify you as having ZERO No Claims Bonus.
Therefore, those with expensive cars to insure, and a full healthy pocket of NCB might be better off to insure a very cheap car to simply keep their NCB going, third party only with minimal use. But of course we are talking about VERY expensive to insure cars, where without the 5 years NCB you would be looking at a cost of say £2k per year. The 65% discount on that will save you the cost of insuring the cheap car in the first year alone, without calculating the sliding scale benefits of later years.