No Claims Bonus Discount Guide

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What is a No Claims Bonus?

A No Claims Bonus is defined as: “A reward in the form of a discount from the insurance company to the policyholder for there not being a claim made on the policy in the previous period of cover.”

What this means is that during the 12 months of your insurance cover, if you or a third party have not made a claim against your insurance, you will be rewarded with a years no claims bonus.  When you renew or decide to move to another insurer, your existing insurer will provide a discount, which will increase for every years no claim bonus you have, up to a maximum of nine.

A car insurance premium is calculated on an assessment of risk which can be quite complex.  A no claims bonus discount is much more straight forward though as it shows historically you are a good driver and less likely to make a claim.  Accumulating no claims bonuses can significantly reduce you’re your car insurance premium.

Stipulations of a No Claims Bonus

As with anything else in life there are terms and conditions of a no claims bonus discount.

A no claims bonus from one previous policy can only be used on one policy.  This means if you were awarded with one years no claim bonus with your previous insurer, you can only use it on one policy at one time.  If you were to buy another car and have two policies running side by side, you would not be able to use your years no claims bonus as it is already in use. 

Remember, it is a no claims bonus discount, not a No fault discount.  This makes a big difference.  If you are unfortunate enough to have your car stolen or, for example, skid on ice and damage the car, if a claim is made and the insurance company is unable to recover the costs from someone else, you will lose some or all of your no claims bonus.

If the insurance providers cannot agree who was at fault for the accident, and agree to split the cost 50/50 for their respective outlays, you will lose some or your entire bonus as well - no matter whom was actually to blame for the accident.  The only way a no claims bonus can be kept in the event of a claim is if you were not at fault and there is a third party to claim from or you have opted for protected no claims bonus when you arranged your insurance.

What discount will a No Claims Bonus entitle me to?

Your no claims bonus discount increases with each year but it is limited.  Although some insurance companies offer different discounts, the following is a typical example but this can vary from insurer to insurer:

Number of years No Claim Bonus held

Discount Earned

1 Year claim free driving

30%

2 Year claim free driving

40%

3 Year claim free driving

50%

4 Year claim free driving

60%

5 Year claim free driving

65%

6 Year claim free driving

65-70%

7 Year claim free driving

65-70%

8 Year claim free driving

65-70%

9 Year claim free driving

65-70%

What can you do to prevent losing your No Claims Bonus?

Quite simply you can pay an additional cost on your insurance policy to protect it. This ensures that if you or a third party makes a claim against your policy, the no claims bonus remains intact. Most insurers allow you to have a maximum of 2 fault claims in a set period, however, if you were to have another accident in the same policy year, then it is possible the step-back process would begin.  Some companies will even offer a guaranteed no claims bonus, this means it doesn’t matter how many claims you make in a set period, your no claims bonus will remain the same.

Are there any discounts for new drivers of people who haven’t any No Claims Bonus?

Here at Autonet we look after our customers, that’s why we may be able to offer a range of introductory discounts.

If your 1st car is already insured and you purchase a second vehicle, we can then look to ‘mirror’ your no claims bonus discount you have on the 1st car.  This means we may be able to get you a discount equivalent to the no claims discount you have on your first car.

If you have been driving a company car, and therefore don’t have any no claims bonus in your own name, we may be able to offer you a discount based on the number of years you have driven the company car claim free.  For example if you have driven a company car claim free for four years, we may be able to get you a 60% introductory discount.

This could also be the same if you were a named driver on a policy. Insurance companies look particularly favourably on spouses in this situation. When you get your own policy in your name, we may be able to offer an introductory discount.

Why not give Autonets sales team a ring today to see if there are any introductory discounts we can offer you?

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