What is a typical No Claims Discount (NCD) for one year free of claims?

A typical No Claims Discount (NCD) for one year free of claims is commonly set at 25%. This percentage reflects the immediate reward given to policyholders who do not make any claims within the policy’s term, as insurers incentivize safe driving behavior and responsible use of insurance.

This practice helps lower the overall cost of insurance for the customer, making it an attractive option for those who maintain a claims-free record. The idea behind offering an NCD is to encourage drivers to be more cautious, thereby reducing the number of claims presented to the insurer.

Higher percentages, such as 50%, 65%, or 70%, are typically associated with additional years of being claims-free, leading to a more substantial discount for those with longer-term claims-free histories. However, a 25% discount after just one year is the standard benchmark used by many insurers.