By Eamon Moran
The greatest impact on the cost of your insurance premium is your no claims bonus. For every year you don’t make a claim on your motor insurance policy, you are given a year of no claims bonus by your insurance company.
This bonus will give you a discount on the cost of your insurance which increases with every year without a claim. When you have five years of no claims, most companies will call this a full no claims bonus and can discount up to 50% off your base premium.
It is because of this no claims bonus that inexperienced drivers or drivers with a recent claims history will have more expensive policies. Inexperience or young drivers under 24 can also get car insurance at a higher cost due to other reasons apart from just their no claims bonus.
1. How Do I Protect My No Claims Bonus?
There are certain scenarios where you can make a claim on your policy without losing your no claims bonus. Typically, windscreen, fire and theft claims won’t impact your no claims bonus. Some companies will also not penalise you for an accident that wasn’t your fault.
However, the best way to guarantee your no claims bonus is to purchase no claims bonus protection when taking out your policy. This means that even if you have to make a claim for an incident that was your fault you won’t lose your no claims bonus. This is unlikely to be included in your policy as standard, so if you would like this cover, it is best to speak to an insurance company who can advise you on adding it as an additional extra.
Most policies will have step back bonus protection included which means that in the event of a claim you will only use a portion of your no claims bonus if you have a four or five-year bonus. In this scenario, it is likely that a four-year bonus would be stepped back to a one-year bonus and a five year would move back to a two-year bonus. This can change from company to company though so make sure to check the details of your policy before you buy.
Even if you change your insurance provider in any given year, your no claims bonus will be carried over from your previous insurer.
2. Does My Experience as a Named Driver Count?
If you have been a named driver on another person’s policy (usually a parent, spouse or relative), for every year of claims free driving, you will gain a year of driving experience. You won’t be entitled to the same as a year of no claim’s bonus, but it will still assist in reducing your premium.
If you are still not sure about no claim’s bonus on car insurance policy, one of our experienced Arachas team member will be able to answer any questions you may have and help you find the best solution for your needs.