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First things first: what a no-claims bonus actually is
A no-claims bonus, sometimes called a no-claims discount, is a reduction applied to your premium for each full policy year without a claim. It’s not a general score for good behaviour, and it isn’t directly tied to whether a car was impounded. The simple rule: no claim, no change to the bonus. A claim, and the bonus may reduce unless it’s protected under your policy terms.
Does being impounded affect your no-claims bonus?
By itself, no. An impound is an administrative or enforcement outcome, not a claim on your policy. Your bonus is usually unaffected unless a claim is reported and settled against the policy. However, an impound could be linked to events that lead to a claim, or it could trigger a policy cancellation, and those related events are what may influence your bonus or future pricing.
When an impound could indirectly change your bonus
There are a few scenarios to watch for:
- At-fault accident with a claim: if the incident that led to the impound also results in an at-fault claim being paid by your insurer, your no-claims bonus will typically step down by the amount set out in your policy. Protected NCB helps, but it doesn’t freeze your base premium or guarantee no change in future pricing.
- Non-fault claim: non-fault claims usually leave the bonus intact, but they can still influence your premium at renewal. The discount stays, yet the overall price might rise because risk factors have changed.
- Policy cancellation or lapse: if your insurer cancels following the impound, that doesn’t “erase” earned bonus automatically, but it can make it harder to use. Most insurers accept proof of NCB earned within a set window, commonly up to two years since the policy ended. Beyond that window, some will no longer honour it.
- Driving without insurance: if the vehicle was seized for no insurance and you later obtain cover, you’re not starting with a negative bonus; you’re starting without one. Any previously earned NCB can still be usable if it is within the acceptable proof period and not already spent by a recent claim.
Protected NCB: what it does and what it doesn’t
Protected no-claims bonus lets you make a limited number of claims without losing all of your discount in one go. It preserves the bonus “step,” but it doesn’t guarantee the same premium. Insurers may still re-rate based on the claim and circumstances. Also, protection only applies while the policy remains valid; if the policy is voided or cancelled for a disclosure or eligibility issue, the protection will not help.
If the policy was suspended, cancelled or marked for review
Insurers sometimes place a policy under investigation after a serious incident. During that period, your bonus doesn’t vanish. The outcome depends on whether a claim is ultimately paid and on the policy’s final status. If the policy is cancelled, keep formal proof of your previously earned NCB, such as a renewal notice or an NCB confirmation letter. New insurers often accept this within their time limits, provided it hasn’t already been reduced by a paid claim.
How long is earned NCB valid if you stop driving?
Most providers accept proof of no-claims earned within a defined period after your last policy ended, commonly up to two years, sometimes longer, depending on the insurer. If you’re off the road beyond that, your stored bonus may expire. To avoid losing it, maintain continuous cover where possible, or plan your return to driving within a timeframe that preserves your evidence of NCB.
What if damage occurs while the car is in the pound?
Damage that occurs after seizure doesn’t automatically mean a claim will be paid under your policy, and it doesn’t automatically reduce your bonus. Whether cover applies depends on your policy terms, the cause of the loss, and who is liable. If a claim is made and paid under your policy, the usual NCB rules apply. If the loss is recovered from a third party without cost to your insurer, your discount may remain intact.
Premiums versus bonus: different levers
It’s useful to separate two ideas. The bonus is a discount mechanism tied mainly to claims history. The premium is the overall price, which can reflect other risk factors. An impound event, licence endorsements, or a gap in cover might influence the base price at renewal even if the bonus remains the same. So you could keep your NCB yet still see a higher premium due to the broader risk picture.
Practical steps to protect your discount
- Confirm claim status in writing: ask your insurer to state whether any claim has been made or paid. Keep copies for your records.
- Retain proof of NCB: download renewal notices and NCB proof letters. Store them securely so you can present them to a new insurer within their time limit.
- Avoid gaps where possible: continuous valid cover helps preserve recognition of your bonus and may keep more options open at renewal.
- Consider NCB protection: if eligible and cost-effective for you, protection may cushion the discount after permitted claims, though it won’t lock the premium.
- Check disclosures carefully: answer insurer questions accurately. Non-disclosure risks cancellation, which complicates use of your earned bonus later.
After you’ve got the car back
Once the immediate issue is resolved, focus on stability. Keep documents together, verify the policy shows the correct dates and driver details, and set reminders for renewals. If you change insurer, present your NCB proof promptly. Over time, clean, claim-free years rebuild both your discount and your rating, and the impound event becomes less relevant to pricing.
Impound processes, time limits and costs vary widely across the UK, and authorities can amend their rules at any time. Information on this site is intended as a general overview and should not be relied on as definitive for any specific impound location.