No claims bonuses sound reassuring. Years pass, nothing bad happens, and you’re told you’ve earned something for your restraint. It feels fair. The detail, as ever, lives elsewhere.
Home insurance no claims bonuses exist, but they don’t behave like their motor insurance cousins. Expecting them to can lead to the wrong conclusions.
What a home insurance no claims bonus actually is
A no claims bonus on home insurance reflects the number of consecutive years you’ve held a policy without making a claim. Insurers use it as one factor when pricing risk.
It isn’t a pot of money. It’s a rating factor. One of many.
- Usually measured in years without a claim
- Applied to buildings, contents, or both
- Used as part of the pricing calculation
The presence of a bonus does not guarantee a specific discount.
How much difference does it really make?
In practice, the impact is often modest. A few claim-free years can help keep premiums down, but they rarely dominate the price.
Location, rebuild cost, contents value, claims history beyond the bonus period, and local risk patterns usually carry more weight.
That’s why two people with identical no claims histories can receive very different quotes.
What breaks a no claims bonus
Making a claim usually resets or reduces the bonus, though the exact effect depends on the insurer and the type of claim.
Some policies disregard small claims. Others do not. Accidental damage claims are often treated the same as larger losses.
- One claim may remove several years of bonus
- Multiple claims can have a compounding effect
- Claim type can matter as much as claim size
This is why people sometimes hesitate before claiming for mid-sized losses.
Protected no claims bonuses
Some insurers offer protected no claims bonuses on home insurance. This allows a limited number of claims without losing the bonus.
Protection does not mean the claim disappears. The bonus may remain, but the premium can still rise due to the claim itself.
The protection guards the label, not the price.
Buildings and contents are often treated separately
No claims bonuses can apply separately to buildings and contents sections.
A claim under contents may not affect the buildings bonus, and vice versa. That separation is helpful, but it’s often overlooked.
When switching insurers, it’s important to know which section the claim applied to.
Are home insurance no claims bonuses transferable?
Usually, yes. But with conditions.
Most insurers will recognise a no claims bonus earned elsewhere, provided it can be evidenced and hasn’t expired.
- Proof is often required, such as a renewal notice
- Bonuses may expire after a gap in cover
- Insurers may cap the maximum recognised years
Transferability is not automatic. It depends on acceptance rather than entitlement.
Moving home and your bonus
Moving house does not usually reset a no claims bonus, provided the policy continues or the bonus is transferred promptly.
A significant change in risk, such as moving to a flood-prone area, can still affect pricing regardless of the bonus carried over.
The bonus moves with you. The risk does too.
Landlords and no claims bonuses
Landlord insurance often has its own no claims structure. A clean history on an owner-occupied policy may not translate directly.
Some insurers treat landlord and residential bonuses separately, even when the same person owns both policies.
Assuming they merge can lead to disappointment.
When a no claims bonus matters less than expected
In higher-risk areas or for unusual properties, the effect of a no claims bonus can be overshadowed by other factors.
That doesn’t make it pointless. It just means it isn’t the lever many people expect it to be.
How to think about no claims bonuses sensibly
A no claims bonus is a helpful signal, not a shield. It rewards stability, but it does not override risk.
Understanding that balance makes it easier to decide when claiming makes sense, and when absorbing a loss might be the better option.