No Claims Bonus - Discount Guide And Rules Explained
A ‘No Claims Bonus’, which actually correctly should be called a ‘No Claims Discount’ is just that, it’s a discount given by insurers from an insurance premium to policy holders who have driven claim free. They build it up over a number of years, usually to a maximum that the insurance company allow. “What is a no claims bonus? No named drivers earn them too?”
The benefit of having a no claims discount is the significant reduction it can make to your annual insurance premium. The person who actually earns the no claims discount is the policy holder only, generally it does not apply to any named driver on the policy. “So how will my no claims bonus be affected if I make a claim?”
If you make a claim and your insurance company can recover their outlay from any other party then your no claims bonus will not be affected what so ever. But if the insurance company make a payment and have no right of recovery from any other person, then the no claims bonus will be reduced. If you make a claim nowadays the insurance companies do not actually take away all of your no claims bonus, most insurance companies operate what they call a step back system. where by you step back 2 years of earned no claims bonus, so for instance if you were on 4 years, your no claims bonus would be reduced back to 2. Or if you were on 2 then you would step back to nil. “How do i prove that i am entitled to a No Claims Discount?”
To prove your entitlement to a no claims discount you will need to provide either your last renewal notice from your previous insurer, or a letter from your previous insurer showing the number of years you’re entitles too. “what are protected no claims bonuses, and what are the benefits?” A protected no claims discount is an optional cover you can buy from your insurer, which allows you to have a set number of claims within a number of years without your no claims bonus being reduced. “i’ve had a company car for several years, would I be able to get a no claims discount through that?”
If you have driven on a company car policy claim free, most insurance companies will allow you a starter no claims discount. In order to obtain a starter discount from your company car driving years, you will need to produce a letter from either your employer, or their insurers, proving the number of years you actually drove claim free. A no claims discount has a shelf life of 2 years, so if you haven’t actually held a policy in this country for more than two years, any no claims discount you were entitled is no longer valid with most insurance companies.
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