Guide: No Claims Bonus
A Breakdown of No-Claims Bonuses, What They are, and How to Use Them
At Riviera Insurance, we understand how important your no claims bonus is when it comes to reducing your motor insurance premiums.
But how does it work? And how can you use it to keep your costs down while protecting yourself from the unexpected?
In this guide, we explain how a no claims bonus works and how you can make the most of it:
What Is a No Claims Bonus?
A no claims bonus (NCB) is a discount earned for every year you hold car insurance without making a claim. Insurers reward careful drivers by offering reduced premiums for each consecutive claim-free year.
This discount builds up over time and can significantly reduce the cost of your insurance policy. The amount of money you can save varies depending on you, your driving history, and the insurer you are with.
How Does No Claim Bonus Work?
Each year you go without making a claim, you gain another year towards your no claims bonus. This bonus applies only to the policyholder, not to any named drivers on the policy. You can usually transfer your bonus to a new provider if you decide to change insurers. No Claims Bonus earnt on a personal vehicle is rarely transferrable to a Commercial policy i.e a Taxi or Fleet. Please check with your broker to ensure are not caught out with unexpected additional premiums.
If you make a claim where you are at fault, then you will lose your streak, resulting in the loss of some or potentially all your bonus. That said, most insurers do offer NCB protection after you bonus reaches 4 years or more, which helps preserve your discount after a claim. It is worth noting, No Claims Bonus protection does not protect you from premium increases following a claim, however, it does protect the amount of discount years earned.
How to Keep Your No Claims Bonus
There are a few actions you can take to retain your bonus. These include:
- Driving safely and following the rules of the road to avoid needing to make a claim.
- For minor damage, it may be more cost-effective to pay for repairs privately rather than claim on your policy.
- You may also wish to add NCB protection to safeguard your discount.
- Always check your insurer’s terms to ensure you understand how your NCB is affected by claims.
- Be sure to provide accurate information to your insurer to keep your policy valid.
How to Keep Your No Claims Bonus if an Accident Was Not Your Fault
If you are involved in an accident that is not your fault, your insurer may still record a claim.
If they recover the full cost from the other party’s insurer, your no claims bonus should remain intact. However, different insurers have different rules, some may still reduce your discount. Claims can take a long time to settle as the insurer negotiate, in the interim you may experience higher premium costs at renewal until the claim is closed as non-fault.
If the cost cannot be fully recovered, your NCB may be affected, even if you were not at fault. Check your insurance policy and find out how your NCB is affected by non-fault claims. If it is, then it may be worth contacting an insurance broker for further advice.
