Written by Michael Foote, Insurance and Finance ExpertMichael Foote is the founder of Quote Goat and has over 13 years experience working in the finance, insurance and currency sectors. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city for a number of firms including HSBC.
No claims discounts – also known as no claims bonuses – can help bring down the price of monthly insurance premiums by quite a considerable amount. But how do no claims discounts work, and how do you get them?
For each year of driving without claiming on insurance drivers will build one-years no claims discount. This amount builds year on year as long as drivers don’t request a claim from their insurance company. The more years of no claims discount you accrue reduces the amount u pay in insurance when it comes time to renew as this is direct proof to your current or new insurance providers that you are a safe, considerate and trustworthy driver.
Each provider has different rules as to how many years no claims bonuses can accrue to. The general consensus is around five years but the final amount is up to the insurers discretion. There are some providers that will reward drivers with up to a 9 year no claims discount of 75% which can see drivers make considerable savings for their safe driving habits.
An average five year no claims discounts can account for around a 30% discount, taking a £1,000 annual insurance cost down to just £700, a saving of £300 a year.
How making a claim affects your NCB
In the event that you do make a claim on your car insurance and your car insurance provider has to pay out you may lose some, or all, of your no claims bonus. If you are hit by another driver and there is evidence that the accident was not your fault then the insurance will be reclaimed via the other drivers insurance company, leaving your no claims discount intact.
Ask for a proof of no claims discount when searching for a new policy, you will be asked for proof of your history when you compare car insurance online and doing so can help you secure a much better price on your future payments. You may also have the option of protecting your no claims bonus which you can read about here.