What Is A Step-Back No Claims Bonus?

Caeva O'Callaghan | November 6th, 2023

Most motorists know what a no claims bonus is, and why it’s good to have. But if your car insurance policy includes the words “step-back”, what exactly does this mean in the event you need to make a claim?

Step-back no claims bonus protection means you won’t lose your no claims bonus completely if you make a claim. Instead, it will be “stepped back” to a previous year’s level of discount.

Having step-back no claims bonus protection is great. You won’t lose your entire discount if you need to make a claim, and you won’t be put off making a claim if you need it.

In this article, we’ll answer questions such as:

  • What does a step-back no claims discount mean?
  • Will I lose my no claims bonus if I make a claim?
  • What does no claims bonus mean?

Different insurance providers offer different levels of no claims bonus. Some come with hidden perks and pitfalls, so get in touch with us to find the best deal on the market.

What is a no claims bonus?

A no claims bonus is a great way to save money on your car insurance. In fact, just one year’s worth of no claims could be worth up to 30% off your premium.

Earn one, two, three, four or five years continuous no claims by driving claims free. Eventually, your discount could build up to 60% off your premium.

All car insurance companies operating in Ireland offer a one year’s no claims bonus should no claim arise under your car insurance policy during one complete year of insurance.

The scale starts after year one and continues to grow up to 5 years or more.

For example, the Zurich no claims bonus scale is as follows:

  • 1 year – 15% discount
  • 2 years – 25% discount
  • 3 years – 35% discount
  • 4 years – 45% discount
  • 5 years – 55% discount

If you make a claim, usually you will lose your no claims bonus. If you’ve built it up over a number of years, this could mean an increase of up to 60% overnight. That’s an enormous expense to swallow.

Check if you have step-back no claims bonus protection

Nearly every insurance company follows an identical scale for no claims bonuses. However, since the discount is off the gross premium, the actual monetary amount of discount will differ from company to company every year.

This is a big reason why getting an insurance broker to shop around for you at renewal time is a great idea. We can compare no claims discount bonuses at every stage of your car insurance policy, to ensure you have the best deal every year.

But if you need to make a claim, it’s not always guaranteed you’ll lose your no claims bonus. A step-back no claims bonus means your discount will only be rolled back two years.

For example, here is Zurich’s stepped back scale:

Discount at last renewal Discount at next renewal
55% 35%
45% 25%
35% 15%
25% 0%
15% 0%

Obviously, if you’ve earned over 25% no claims bonus this is much more preferable than losing your entire no claims discount, especially if you’ve built it up over a number of years.

Other no claims bonus factors

Whether your claim goes through successfully depends on if your insurance company regards the incident as “punishable”. This complicates matters, as it means a step-back no claims bonus is not automatically guaranteed.

For instance, most insurance companies do not regard a fire or theft claim as “punishable” and they will not step-back your bonus.

On the other hand, no insurance company counts a windscreen claim against you. These types of claims are excluded unilaterally from the no claims bonus step-back scheme in Ireland.

It’s also important to note that some insurance companies do not have any no-claims bonus protection whatsoever. For instance, Patrona’s economy product will reduce your no claims bonus to zero if you make any claim.

This is why it’s extremely important to involve a broker if you’re concerned about preserving your no-claims bonus. You can call and talk to our car insurance experts from Mon-Fri between 8.30am and 5.30pm on 0818 224433 or 042 9359051.

If you need an instant car insurance quote, our quote engine checks the Irish market for your specific requirements.

All Information in this post is accurate as of the date of publishing.