No-Claims Bonus For Car Insurance – Is there Different Types?
Caeva O'Callaghan | August 27th, 2020
You may have heard that a good no claims bonus can help you save money on your car insurance. But how does it work, and are there different types out there?
A no claims bonus on car insurance is a discount you get because you haven’t made a claim. Insurance providers reward you for a number of claim-free years by giving you money off your premium when you renew.
A no claims bonus is a great way to save money on your car insurance. By driving carefully and avoiding making a claim, you’ll save yourself money in the years to come.
In this article, we’ll answer questions such as:
- What is a no claims bonus?
- Are there different types of no claims bonus?
- How does a no claims bonus affect my car insurance premium?
Even if you’re a young driver, you can start building up a no claims bonus right away. But beware – your insurance company may “step back” your no claims bonus or remove it completely if you make a claim.
What is a no claims bonus on car insurance?
If you don’t make a claim on your car insurance policy, you accrue a no claims bonus for every year that you remain claim-free. You may also know it as a no claims discount or NCB. It is important to remember that it only matters whether or not you make a claim at all. It doesn’t matter whether it was your fault or not.
Say, for instance an uninsured driver hits your car and you had to claim for it. In most cases, you would not be able to earn your no claims bonus for that year. Furthermore, the existing bonus on your policy may step back by two years or even to zero.
You can earn no claims on all types of motor insurance policies – car, van, commercial vehicle, tractor and other types of vehicle. It also applies to all types of cover: third party, third party fire and theft, and fully comprehensive.
No claims bonuses reduce your car insurance premium. In other words, the more of a no claims bonus you have, the less you’ll pay each month. Normally, you can earn no claims discounts for up to five consecutive years – although, some insurers will let you earn it for up to nine years!
Subsequent years of no claims won’t reduce your premium any further, although not claiming will safeguard the level of no claims bonus you have.
Types of no claims bonus
Most insurance companies offer an introductory bonus for having proven, claims free driving experience.
This is great news for young drivers. When you first get your license, it’s a good idea to get named on a parent or relative’s policy. This will help you build up experience (and no claims bonus) before buying your own policy. This will stand you in good stead with insurers.
This is also a great idea for people coming off fleet policies. Fleet policies are a type of vehicle insurance which covers company or business vehicles, such as a fleet of vans. If you have changed your job or no longer drive a company vehicle, you won’t be under your company’s fleet insurance. However, if you have evidence of claims-free driving from the insurance company on which you were named, we can often get you the equivalent no claims bonus.
Protecting your no claims bonus
On many policies, you can pay a little extra on your monthly premium to protect your no claims bonus. This means in the event of making a claim, you’ll preserve your discount for the following year.
This is a good thing to do if you’re particularly worried about losing your no claims discount, or if you’ve built up a significant discount over a number of years.
Unfortunately, you can lose your no claims bonus, even if it isn’t your fault. For example, if your car was stolen, you’d need to make a claim and your bonus could be lost. The car insurer may be able to recover all costs from another insurer where a claim is not your fault. In this case, you wouldn’t lose your no claims discount.
If you do not have insurance in your own name for 2 years, your no claims bonus lapses, even if you have taken out protection.
If you want to give us a call, we’d be happy to talk through all the different types of no claims bonus, and help you find the right one for you.
If you have questions on your no claims bonus, call us today and we can help!
If you are unsure about what level of no claims bonus you have on your car insurance or if you are searching the market for a new policy and want to make sure your no claims bonus is considered in your premium, pick up the phone and talk to our car insurance experts. We can check the market for you and look at the different options available when it comes to your no claims bonus. We are available for calls Mon-Fri between 8.30am and 5.30pm on 0818 224433 or 042 9359051.
If you need an instant car insurance quote, our quote system compares the Irish car insurance market from 13 providers. It is worth noting, that 45.4% of our customers who picked up the phone and called us got a more competitive quote by talking directly to us.