What’s Covered – And Excluded – Under A Home Insurance No-Claims Bonus?
Caeva O'Callaghan | February 12th, 2020
Most insurance companies give you a no-claims bonus on home insurance policies. This means that if you make no claims during a year of insurance, you’ll get a discount going forward.
But the discount and the terms and conditions may vary – so it’s worth knowing what you’re getting yourself in for before you commit.
In this article, we’ll take a look at:
- What will cause you to lose your home insurance no-claims bonus?
- What claims don’t affect your home insurance no-claims bonus?
- What happens to your no-claims bonus when you make a claim?
A no-claims bonus is an attractive hook for any policy, but they might not include what you expect. Make sure you have all the facts before you proceed.
What is a no-claims bonus?
Insurers want you to stay safe (anyone’s first priority), and they also don’t want to spend any money on expensive claims. So, if you don’t make a claim within your first year of a policy, a no-claims bonus is a discount that can be applied going forward to reward you for being safe.
The value of the discount varies from insurer to insurer. It generally starts at 10% to 15% for a one year no-claims bonus and increases incrementally with each additional claim-free year to a whopping 40%.
You may be familiar with a no claims discount when it comes to car insurance. But home insurance is a different matter. Car insurance no claims have some exemptions – for example, a windscreen claim may not impact on your no-claims bonus.
However, any claim you make on your home insurance policy – big or small – will reduce your no-claims bonus.
What’s covered… and what’s not?
Unlike car insurance, home insurance providers don’t distinguish between ‘fault’ and ‘no-fault’ claims when it comes to discounts. This means any claim you make will make you lose your no-claims bonus.
But, unlike car insurance, it may not affect your standing with future insurance providers.
Depending on the insurer, there may be some flexibility on small claims. But they won’t be able to ignore it if you made a big claim (€5K plus), or a claim involving water damage (flood, burst pipes) or subsidence. These are big issues and may lead to you paying a higher premium.
What happens when I make a claim?
When you make a claim, your no-claims bonus is removed. However, it may not be necessary to make a claim in the first place. Compare how much you save with your no-claims bonus to the amount you would receive for your claim. In a lot of cases, it’s worth paying out of pocket to protect your no-claims bonus, as this saves you more in the long run.
If you want to make a small claim for minor damage or theft of a low-value item, it might not even cover the cost of your excess. In this case, it would make more financial sense to pay for the replacement or repair yourself.
But if something major has happened, you’ll be better off going ahead with the claim. You can phone your insurance provider or broker to check if making a claim is in your best interest.
Making a claim on your buildings insurance usually won’t affect your no-claims bonus on the contents insurance, and vice versa.
As always, check your policy to be sure or call your home insurance broker to double-check.
How to protect your no-claims bonus
Many home insurance providers offer no-claims protection for an extra fee. This additional cover will preserve your no-claims bonus in the event that you make a claim. By paying a bit extra, if you ever have to make a claim your no-claims bonus won’t be lost.
There’s another way to protect your no-claims discount, of course: just reduce the likelihood you’ll make a claim on your home insurance.
This can be as simple as the following:
- Install a home alarm, window locks and security lights to keep your home secure
- Secure loose tiles, guttering and fences, and fell dangerous trees and branches to avoid weather damage
- Insulate your pipes and water tanks so they don’t freeze in the winter
- Is your area prone to flooding? Stock up on sandbags to prevent water getting into your home
In short, a no-claims bonus works differently with home insurance than it does for car insurance. Any claim will remove it, so think carefully before you make that call, and ring up your provider to check if it’s worth going ahead.
Talk to us in QuoteMe.ie with any queries you have on your no claims bonus.
One of the main benefits of using a broker for your home insurance is that you can consult us with any questions you may have. If you have any questions regarding your no claims bonus please contact us and we can answer your queries directly. We provide immediate professional advice from certified and trained insurance agents. Please, never hesitate to call on 0818 224433 or 042 9359051.
You can also get an immediate home insurance quote online with us. We compare home insurance in the Irish market from 12 insurers to get you the right cover for your individual circumstances. We look forward to hearing from you soon.