No claims discount sometimes referred to as no claims “bonus” is the number of years an individual has been driving and has not made a claim on their car insurance policy.
As it relates to the percentage/amount, this usually varies and is determined by the insurance company as they would use their discretion when quoting for a customer. Your no claims discount should not be confused with your Safe Drivers Discount as this is something completely different.
N.C.D. is used to help reduce an individual’s car insurance premium on a yearly basis. It is something that is earned. Therefore, you cannot be insuring your vehicle for the first time and be entitled to maximum no claims. You’d start at first year N.C.D and work your way up. It should also be noted that even though a person may be earning maximum discounts, it may not be the full percentage offered. For example, some insurance companies can go up to 70% – 80% as their maximum no claims. Both the 70% and 80% are considered maximum, however, the difference lies with one client having no at-fault accidents compared to the other client who has never had an accident at all. For some, it may seem confusing, but it makes perfect sense.
Your N.C.D is measured on a 5-6-year basis, mainly 5 for most insurance companies. When you’re shopping around for a quote you may hear an underwriter ask if you’ve ever been involved in any accidents or made any claims over the last 5 years. Some may go as far as to ask whether you were at fault in these accidents or not if you had any. This ties back in with what was stated earlier with the difference between earning maximum (70%) and full maximum (80%).
If you make a claim, whether own damage or otherwise, your no claims discount is affected. It will be reduced, causing your premium to be higher than it was the previous year. If the police report deems you not at fault, your N.C.D will remain the same. For those drivers who have been driving for more than the 5 years and who are earning maximum and safe drivers discount, if they are involved in a claim and are at fault, some insurance companies will not touch their no claims, but will take away their safe driver’s discount.
Your no claims can also be affected if you have not been insured for a period of time. For some companies a maximum of 2-3 years. If this 2-3-year period has passed, you’d have to start over fresh. Some insurance companies may use their discretion and still offer at least first-year discounts in these situations.
No claims disocunt in most cases only applies to the policyholder, but if there is an additional driver, some insurance companies allow them to earn their own no claims which usually isn’t much, but it’s a start.
To find out more about your N.C.D and have us find you the lowest quote, visit us or call us today at www.bestquotebb.com or 537-0140.