What Is a No Claims Bonus?

Even the safest of drivers may find themselves falling victim to road accidents caused by other motorists, or having to make other claims on their car insurance for vehicle damage or theft. However, if you've been lucky enough to avoid making claims on your car insurance for a year or more, your insurer will recognise your lower risk and reward you with a no claims bonus (NCB) - a discount off the cost of car insurance.



One of the most appealing aspects of a no claims bonus is that it can increase year by year, and although some insurers place a limit on the number of years that can be counted - usually five years, but sometimes more - the savings on car insurance quotes can be substantial, with an NCB of five years or more typically entitling you to between 60 and 75 per cent off the cost of your insurance premiums.



While a no claims bonus can be a great advantage for drivers who haven't made any insurance claims, it can sometimes represent another loss if motorists do need to make claims - which can push up the price of premiums substantially. However, this doesn't have to be the case when drivers purchase NCB protection, which can safeguard their no claims years in the event that they make subsequent claims.

While you will still be able to enjoy the discounts of a no claims bonus, the fact that you have been involved in an accident and made a car insurance claim will nevertheless affect the cost of premiums to some extent, though not as much as it would without this protection in place.



If you're eager to start earning a no claims bonus and be rewarded for careful driving, you should ensure maximum adherence to road laws at all times, including sticking to speed limits and staying focused on the vehicle without distractions. It only takes the briefest lapse in concentration for your vehicle to be involved in accidents that require costly repair, and while your best option is usually to claim the repairs on your insurance policy, you may feel disappointed if your no claims history has to start back at day one.



Keeping your car in good condition is another way to help ensure you avoid accidents, especially if you're driving in adverse weather conditions such as snow, ice or heavy rain.If you are involved in accidents that are deemed to be of your own causing, rather than that of another party, it's your insurance that will have to foot the repair bill, and your no claims discount that will be lost. The same applies if your vehicle is lost.



The author of this article is a part of a digital blogging team who work with brands like LV. The content contained in this article is for information purposes only and should not be used to make any financial decisions.