No Claims Bonus
As a driver goes through a year without making a claim they earn what is called a no claims bonus. This is a percentage that is taken off the full cost of the insurance as a reward for not claiming and can get up to 70 percent at the highest levels.
There tends to be a maximum number of years that can earn the no claim bonus, often 4 and sometimes 5. After this number of years the no claims bonus is at its maximum and will not get bigger. It is also well worth protecting the no claims bonus when there are a few years worth earned since the additional cost of going back to paying the full cost can be huge.
The insurance companies do not always remove all the no claims bonus if there is an accident. Some will take off a couple of years worth, meaning the driver still receives insurance at a reduced cost.