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When considering canceling your insurance policy, it’s essential to understand how it may impact your no claims bonus (NCB). A no-claims bonus (NCB) is a reward given to policyholders for not making any claims during a specific period. If you cancel your insurance, you might lose your accrued NCB and also lead to higher premiums when you seek coverage again. 

Let’s delve into how canceling insurance affects your NCB and what considerations you should keep in mind.

Key Takeaways

  • Canceling car insurance can affect your no-claims bonus (NCB), which rewards claim-free periods.
  • NCB accumulation leads to future premium discounts, but canceling insurance might reset NCB to zero, resulting in higher premiums later.
  • Alternatives to cancelation include transferring NCB to a new policy, suspending the policy when not using the car, and planning ahead to align decisions with future insurance needs.

Understanding the impact of cancelation on no-claims bonus 

  • NCB accumulation – As you drive claim-free over the years, your NCB increases, leading to potential discounts on future premiums.
  • Cancelation impact – If you cancel your insurance and do not transfer the policy to another vehicle, your NCB might reset to zero, resulting in higher premiums when you secure coverage again.
  • Transferring NCB – You can sometimes transfer your NCB to a new policy or vehicle if you switch insurers, but this depends on the provider’s policies.

What are the alternatives to canceling your car insurance to retain your no-claim bonus?

  • Policy transfer – If you plan to get a new car or change insurers, inquire about transferring your NCB to maintain the discount.
  • Policy suspension – If your car will be unused for a while, explore the option of suspending your policy rather than canceling it to retain your NCB.
  • Plan ahead –  If you still want to cancel, consider the long-term impact on your NCB and assess if the decision aligns with your future insurance needs.


Canceling your car insurance can have consequences for your no-claims bonus. To preserve your accumulated NCB, explore alternatives like policy transfer or suspension, and plan ahead to make informed decisions regarding your insurance coverage. Always consult with your insurance provider to understand the specific policies and options available to you.