What is a no claim bonus?
If you have taken out comprehensive car insurance it will come with a no claim bonus, which is also known as a no claim discounts or rating scheme which gives you a discount every time you do not claim. This will increase for each year you have not placed in a claim until it reaches a maximum level. It can then be used to lower your premiums.
Can it lower your premiums?
A no claim bonus can be used to discount your premiums. By being a safe driver who has a clean driving record you can reap the benefits of getting a lower premium. Keep in mind that insurers base your premiums on the level of risk you are.
They take various factors into consideration when determining whether you are applicable for a no claim bonus. Things such as the number of years you have been driving and your claim history will be assessed to determine whether you are applicable. This is why you should try minimizing the number of claims that you make.
How much can I get from my no claims bonus?
No claims bonus is the same. The amount that you can get with your no claim bonus will differ based on your history and driving experience. This could be anywhere between 0% and 60%. As each year passes without you placing a claim you will move up on the discount level until you reach the maximum level of the 65% no claim bonus. Most policies keep 60% as the highest no claim bonus when you take out a new policy. You are then able to unlock the 65% claim free privilege after you have not had a claim free year.
Unfortunately, not everything is within your control. There are circumstances which can cause you to lose out on your discount that can force you to make a claim. For example, having your star stolen is one way to quickly erode any chances that you stood.
What is a no claim bonus protection?
A no claim bonus protection means that you are able to make one claim in a policy year and your no claim bonus will stay the at the same level. But keep in mind that by doing this it will not be considered a claim free year. If you proceed to make more than one claim on your no claim bonus protection it will affect your no claim bonus in the sense that it can reduce your discount level.