The discount is usually reduced by two steps after a claim. Whenever a claim is made under a motor policy, the discount will always be affected unless your insurance company can recover its costs from another party.

If your insurer can make a full recovery or is only stopped from doing so by a knock-for-knock agreement, your no claim discount may not be affected. Similarly, if you recover all your uninsured losses (such as accidental damage excess) then your discount may not be affected.

Sometimes your no claim discount will be reduced at policy renewal time if a claim is expected to come in, or is still waiting to be settled. The discount may be reinstated if your insurer subsequently doesn't have to pay out under the policy.