Car insurance no-claims bonus class: save money through smart classification and optimisation
22.05.25
8
Minutes
Katrin Straub
Managing Director at nextsure
The no-claims bonus class of your car insurance is a crucial factor in your premium. Understand the system to reduce costs in the long term. This article shows you how it works and where there is potential to save.
The topic in brief and concise terms
The no-claims bonus class rewards accident-free driving with lower premiums in motor liability and comprehensive insurance.
A claim leads to a downgrade in your no-claims bonus class, which results in higher premiums; options such as no-claims bonus protection or paying for it yourself can prevent this.
No-claims bonus classes can be transferred under certain conditions, which can be particularly financially advantageous for new drivers.
Quick Facts: Car insurance no-claims bonus class at a glance
The no-claims discount class (SF class) is a rating system used by car insurers. It records the number of years a policyholder has driven without an accident. A higher SF class results in a lower insurance premium. The scale often ranges from SF class 0 for new drivers to SF class 35 or even SF 50 for drivers who have been accident-free for many years. In addition to the standard classes, there are special classes such as SF ½, S or M. These are used, for example, for new drivers or after several claims within a year. The SF class is relevant for third-party liability and comprehensive car insurance; partial cover does not use SF classes. You can usually find your current classification on your annual premium statement.
Practical section: How your no-claims class is determined and affects the premium
Your SF class in car insurance is reassessed every year. If you drive accident-free for a calendar year, you will usually move up one SF class. For example, if you have held your driving licence for five years and have not had a self-inflicted accident during that time, you will usually reach SF class 5. New drivers often start in SF class 0 or, if they have had their driving licence for three years already, in SF class 1/2. You can find the exact effect on your premium rate in your insurer's SF class table. Example: with a base premium of EUR 1,000 and a classification in SF class 10 with a premium rate of, for example, 38 per cent, you pay EUR 380. In SF class 1/2 at 50 per cent, it would be EUR 500. The premium savings from a high SF class can be considerable. The exact percentages vary between insurers.
Here is an overview of how claim-free years can typically affect you:
1 claim-free year: classification in SF class 1
3 claim-free years: classification in SF class 3
5 claim-free years: classification in SF class 5
10 claim-free years: classification in SF class 10
15 claim-free years: classification in SF class 15
More than 35 claim-free years: often the highest SF class with the maximum discount
This system clearly shows how accident-free driving directly translates into lower costs for your SF class insurance.
Expert insight: Downgrading after a claim – what you need to know
An at-fault accident, which your motor insurer settles, inevitably leads to a downgrade of your no-claims bonus class. This means that your no-claims discount decreases and your insurance premium rises in the following year. The exact number of classes by which you are downgraded depends on your current no-claims bonus class and your insurer’s downgrade table. These tables form part of the contract. Even high no-claims bonus classes can be downgraded to very low classes, especially if there are multiple claims. However, there are ways to reduce or avoid a downgrade. One option is the so-called no-claims discount protection offered by many insurers. This prevents one downgrade per year after a claim. Alternatively, you can pay for minor damage yourself to protect your no-claims bonus class. Check carefully up to what amount of damage paying yourself is worthwhile. Our expert tip: always clarify the details of downgrades and protection mechanisms before signing the contract. Knowing the premium rate of your car insurance is essential here.
Transferring your no-claims bonus class: opportunities and requirements for lower premiums
Under certain conditions, you can transfer your SF class to another person. This is often possible within the family, for example from parents to children or between spouses. The recipient can therefore benefit from a lower premium. An important condition is usually that the recipient holds a driving licence and has regularly used the vehicle or lives in the same household. However, you can only transfer as many claim-free years as the recipient could themselves have accumulated since obtaining their driving licence. For example, if a child has had a driving licence for three years, they can transfer at most SF class 3, even if the parents want to transfer SF class 20. The transfer is usually irreversible; the person transferring loses their SF class. The process usually requires an application form from the insurer. Find out exactly about the conditions to transfer the discount on your motor insurance. This arrangement can be a significant financial relief, especially for young drivers, if they take over motor insurance from their parents.
Special regulations for the no-claims bonus class: second cars and new drivers in focus
For new drivers and second cars, there are special rules for classification in the no-claims bonus class of car insurance. New drivers who have held their driving licence for less than three years often start in no-claims class 0. With more than three years’ driving entitlement, classification in SF 1/2 is common. Some insurers offer more favourable special classifications for insurance for young drivers if, for example, the parents are already insured with the same provider. For a second car, many insurers grant an improved classification, often SF 1/2 or even SF 4, if the primary vehicle has already reached a certain no-claims class. The second-car rule can also benefit new drivers if the vehicle is insured through the parents as a second car. In the event of a policy interruption, for example due to the sale of a vehicle, the no-claims class is usually retained for a period of seven to ten years, sometimes even indefinitely. After this period, a new classification as a new driver may apply. It is advisable to find out about the cost of car insurance for new drivers and the specific affordable cars for new drivers.
The following points are often relevant for special arrangements:
Length of time the driving licence has been held for the initial classification.
No-claims class of the primary vehicle for second-car classification.
Regular use of the vehicle by the named driver.
Maximum length of an insurance break without losing the no-claims class.
Expert insight: Legal aspects and design tips for the SF class
The exact rules for no-claims classes, premium rates and downgrades are set by each insurer in its General Terms and Conditions of Insurance (AVB). Since the deregulation of the insurance market in 1994, there has no longer been any statutory standardisation of no-claims class tables or premium rates. Each provider calculates these independently. When comparing insurance policies, pay attention not only to the price, but also to the details of the no-claims class rules. This applies in particular to the downgrade tables and the conditions for no-claims bonus protection. Our expert tip: keep old insurance documents in a safe place. After a longer break in cover, proof of the last no-claims class achieved can be crucial to avoid being classified as a new driver again. The transfer of car insurance to a child is one example where a precise understanding of the conditions is important.
The most important strategy for optimising your SF class is claim-free driving. Each year without an at-fault claim improves your rating and can potentially lower your premium. For minor claims, consider paying them yourself to avoid a downgrade. No-claims discount protection can also be useful to secure the best no-claims bonus class you have achieved for one claim per year. Compare offers regularly, as insurers' premium rates and SF class systems can differ. Take advantage of options such as the second-car rule or the transfer of SF classes, if they are suitable for your situation. Careful review of your options can save you several hundred euros over the years. Remember that a high SF class is a valuable asset. With foresight and the right decisions, you can secure consistently favourable terms for your car insurance.
Here are some measures to improve your SF class:
Always drive defensively and avoid accidents.
For small claims, check whether paying yourself is cheaper than a downgrade.
If your insurer offers it, take out no-claims discount protection where appropriate.
Use the option of transferring SF classes within the family, if sensible.
Find out about special ratings for second cars.
Compare the terms of different insurers, especially the downgrade tables.
These measures help you actively manage your car insurance SF class.
Your path to an optimised car insurance no-claims bonus class
The no-claims discount is a powerful tool for influencing your car insurance costs. A thorough understanding of how it works, from the initial classification through to the annual adjustment and the impact of claims, is the key. Use the strategies outlined here, such as paying for minor damage out of pocket or transferring no-claims discount classes. Taking a deliberate approach to your no-claims discount will pay off in the long term. Bear in mind that every insurer has its own rules. A close look at the policy terms and a regular comparison are always worthwhile. This ensures that you are not only safe, but also cost-effective on the road. The right handling of your no-claims discount can reduce your annual expenses by a significant amount.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific suggestions for optimisation.
More useful links
Wikipedia offers comprehensive information on the no-claims discount in German motor insurance.
The General Association of the German Insurance Industry (GDV) explains how age affects motor insurance premiums.
The Federal Statistical Office (Destatis) publishes press releases that may contain relevant statistics, including on vehicles.
The Federal Motor Transport Authority (KBA) provides detailed vehicle statistics on the vehicle stock in Germany.
Under Gesetze im Internet, you will find the Insurance Contract Act (VVG), which governs the legal basis for insurance.
The Stiftung Warentest offers a calculator and articles on when it is worth paying for damage to your car yourself.
The General Association of the German Insurance Industry (GDV) provides the General Conditions for Motor Insurance (AKB) as a PDF.
FAQ
How is my no-claims discount class determined when I insure a car for the first time?
As a new driver, you usually start in SF class 0 or, if you have held your driving licence for more than three years, in SF class ½. However, there are ways to achieve a better classification, e.g. via your parents’ second-car rule.
What happens to my no-claims discount class when I change my car insurance?
Your achieved SF class is usually taken over by the new insurer. However, the exact premium rates can vary, as each insurer has its own tables.
How long does my no-claims bonus class remain valid if I deregister my car?
Most insurers store your no-claims class for seven to ten years. Some providers also have longer retention periods, or the no-claims class never expires. Proof is important when you take out insurance again.
What role does the no-claims bonus class play for partial comprehensive insurance?
For partial comprehensive cover, the no-claims bonus class plays no role. It is only relevant for motor third-party liability and comprehensive insurance.
Can I always avoid a downgrade of my no-claims bonus after an accident?
You can avoid a loss of your no-claims bonus by paying for the damage yourself or if you have agreed no-claims protection in your policy. No-claims protection usually applies to one claim per year.
Is it worth paying for minor damage yourself to keep your no-claims bonus class?
Yes, it often makes sense to cover minor damage yourself. Compare how much an increase in your premium due to a downgrade over the next few years would cost with the one-off cost of the damage.
