If you have made no claims in a particular year, the insurance company gives a discount in the premium for your car insurance in the subsequent year. This discount in premium is termed as No Claims Bonus. It can be viewed as an incentive provided for safe driving with the Insurers rewarding policyholders by providing a discount on the ‘Own Damage’ part of the premium. This discount increases with the number of no-claim years starting from 20% and going up to a maximum of 50%. No claim bonuses are transferable from one insurer to the other i.e. even if you switch your car insurance policy to a new insurer in a given year, you can be eligible for a No Claim bonus for any claim free years with your previous insurer.