Friday, December 7, 2012

Car Insurance - What You Need to Know About No Claims Bonus


What is No Claims Bonus?

When car insurance providers make quotes for drivers they do so based on a number of risk factors. One of these is the likelihood that the driver will make a claim against the policy that will cost the insurer money. Therefore if you can prove you offer a low chance of making a claim on your insurance then you can minimise your risk.

• A no claim bonus offers you the perfect way to do this. If you do not make any claims on your car insurance then over the years you will build up your no claims bonus.

• When you apply for quotes for new car insurance policies then you will be asked to provide details of any no claims bonus years that you hold.

• The bonus will minimise your risk and so can offer you some great savings on your new policy.

• Even one year of no claims could save you money on your car insurance.

Named Drivers

It is important to remember that only the policyholder will be eligible for the no claim bonus. This means if you have any named drivers on your policy then in most cases they will not accrue a bonus, even if they do not make any claims.

• Also if you use a company vehicle then in some cases you will not be building no claim bonuses up in your own name.

• For example if you are a limited company director and use company car insurance then you may not be able to transfer the no claims you build up over to your own name if you want to insure a private car in the future.

• Also those drivers that use vans insured by their employers under company policies may not be able to build up any no claims bonus that they can transfer across to privately owned vehicles.

Written Proof

These days with computer records the details of your no claims bonus should be clearly listed on your last policy. However in some cases you will be asked to provide written proof of your no claims bonus. Once you have achieved a years worth of no claim bonus then your car insurance company should provide you with written proof. If not then you need to contact them and ask for them to send you an up-to-date copy in writing.

If you are unable to prove your bonus when required you may lose any discounts provided in your new car insurance policy.

Multiple Vehicle Policies

You do need to check multiple vehicle policies carefully. In some cases you will only be able to use your bonus on a single vehicle at a time. Other policies will let you build up bonuses against different vehicles.

• If you have two completely separate insurance policies then you may be able to get a discount on your new policy based on the no claims bonus from your first vehicle.

• This is common with separate van insurance policies if you already have no claims on your car insurance.

• To get this type of discount you will need to provide the details of your car insurance no claims bonus to the new vehicle insurance provider.

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