No Claims Bonus Explained
Should you take out an insurance policy and have a year with no accidents or claims, the following year you will be entitled to at least a 10% reduction in the premium. The following year should no claims be made, then another 10% is given subsequently reducing your premium prices on a yearly basis.No Calims Bonus is a special discount used just by insurance companies to benefit their customers. The discount is applied to the premium when the policyolder has had a year without any accidents or claims. Discounts of up to 75% (usually around 60%) are available after a four or five year period and are transferrable from company to company.
Some companies offer new customers an introductory discount of up to 15% to take out a policy with them so it is wise to shop around if you are a new or young driver with no discount.
Once you have gained some no claims bonus, some policies allow you to protect it. You will be charged a slightly higher premium but can usully have up to 3 claims in a stated period before your no claims bonus is reduced.
Should you have an accident or claim, then the no claims discount you currently have is reduced to a lower percentage which various from company to company.
To summarise, aintaining a claim-less driving record and gaining no claims bonus is the largest contributor to gaining cheaper car insurance over any other factor.
We hope this article explained the meaning of no claims bonus.