Back to Car
Car·6 min read·

No claim bonus explained (Australia)

How a no claim bonus (NCB) and rating 1 work on Australian car insurance, how claims affect your rating, what protected no claim discount means, and why the discount does not always transfer between insurers.

A no claim bonus (NCB) is the reward for being a careful driver: the longer you go without an at-fault claim, the bigger the discount on your premium. Most Australian insurers wrap this into a rating scale, and "rating 1" — the top of the scale — is the one everyone is trying to reach and keep.

How the rating scale works

Insurers typically use a numbered rating (for example rating 1 down to rating 6). Each claim-free year moves you towards rating 1, where you earn the maximum no claim discount. A new driver usually starts lower on the scale and climbs with each year they do not make an at-fault claim.

What happens when you claim

An at-fault claim generally knocks your rating back, which increases your premium at renewal — sometimes for several years until you climb back up. Crucially, this usually only applies to claims where you were at fault or could not identify the other party.

You generally keep your bonus when:

  • You were not at fault and can identify the other driver (name, contact and registration).
  • The claim falls under a benefit that specifically does not affect your rating, such as some windscreen claims — check your PDS.
This is why a small, near-excess repair is often not worth claiming. If the payout barely exceeds your excess but costs you your rating 1, you can pay more in higher premiums over the next few years than you received.

Protected no claim discount

Many insurers offer an optional protected (or guaranteed) no claim discount. For an extra premium, it lets you make a set number of at-fault claims in a period without dropping your rating. Two things to remember: it protects your rating, not the base premium (which can still rise for other reasons), and the exact terms — how many claims, over what period — vary by insurer.

Does it transfer between insurers?

Your bonus reflects your claims history, not a transferable voucher. A new insurer will usually recognise your record, but because rating scales are not standardised, the discount can be applied differently. It helps to keep evidence of your history — renewal notices and your current rating — when you shop around, so a new insurer can price you correctly.

Protecting your bonus

  • At an accident, always collect the other driver's full details
  • Weigh a small claim against the cost of losing your rating
  • Consider a protected NCB if you have reached rating 1
  • Keep your renewal notices as proof of your claims-free record
Insuro keeps your car policy schedule, rating and renewal dates in one vault, so your claims history and current discount are easy to find when you compare insurers. Forward your renewal emails to your private@insuro.com.auaddress. Free during beta.

Frequently asked questions

What is a no claim bonus?⌄

A no claim bonus (NCB) is a discount on your car insurance premium that grows the longer you go without an at-fault claim. Many insurers express it as a rating scale, with 'rating 1' being the best (maximum discount).

Does making a claim affect my no claim bonus?⌄

An at-fault claim usually reduces your rating and therefore increases your future premium. A claim where you are not at fault and can identify the other driver generally does not affect your bonus.

What is a protected no claim discount?⌄

A protected (or guaranteed) no claim discount is an optional add-on that lets you make a set number of at-fault claims within a period without losing your rating. It costs extra and does not protect the base premium from rising for other reasons.

Does my no claim bonus transfer if I switch insurers?⌄

Often yes — a new insurer will usually recognise your claims history — but rating scales are not standardised, so the discount may be applied differently. Your bonus is tied to your record, not automatically to a document, so keep proof of your history.

Stop losing track of your policies.

Free during beta. Forward policy emails to your private @insuro.com.au address and we take it from there.

Create your free vault

Related reading

Does car insurance cover hail damage?

Comprehensive car insurance usually covers hail — third party and CTP never do. But you cannot buy cover once the storm is forecast, and hail write-offs depend on how your car is valued. Here is how it works.

Comprehensive vs CTP (compulsory third party)

CTP is compulsory, but it is not the same as comprehensive. Here is how the main Australian car insurance layers differ — and why renewal dates often do not line up.

Do you actually need comprehensive car insurance?

Comprehensive is not compulsory, but going without can be a costly gamble. Here is a clear way to decide whether comprehensive car insurance is worth it for your situation in Australia.

Fleet insurance under 15 vehicles: how small businesses manage multiple car insurance policies

Fleet policies usually start at 15 vehicles, so small businesses end up juggling a dozen individual comprehensive policies with no tools from insurers to manage them. Here is a system that works.