No
Claims Bonus
Information about
your car insurance no claims bonus:
A no claims bonus
can significantly reduce the cost of your car insurance
cover. If you have never heard of the no claims bonus, or
are unsure as to its workings or methodology it can be explained
as follows:
Insurance works upon risk.
The less risk the company has to pay out in financial compensation
the less premiums they will charge as potentially you will
be a customer who is less costly than one who will claim.
Any historical information that the car insurance company
can use in calculating a premium they will. They have a whole
host of statistics or which ‘type’ of person is
more likely to claim, these factors in turn affecting the
premium. These range from being a smoker, to your UK living
location (some areas have higher crime than others and your
car has more chance of being stolen) , to your age (young
drivers can be seen as more reckless, much older drivers can
have declining eyesight and reaction times). The no claims
bonus is rather more basic than this. Quite simply if you
haven’t claimed before, you are seen as more unlikely
to in the future than someone who has. The reward for not
claiming is a reduction in the cost of cover, thus the phrase
‘no claims bonus’. This can be built up year upon
year and the customer can be rewarded for each without claim.
There are many different
insurers, each of which may calculate the exact discount on
premium or ‘bonus’ that can be provided. However
typical no claims bonus schemes range from zero years to a
maximum of four to six. The total bonus can be as much as
a sixty five reduction in premium for non-claiming customers
– a thirty percent bonus for the first year, forty percent
for the second, fifty percent for the third, sixty percent
for the forth and sixty five for the fifth and final year
of bonus.
So you can now see how the
no claims bonus works for car insurance and exactly
how much money you could save. The difference in premiums
can be vast. For example Bob made a claim last year, so this
years premium he has quoted five hundred pounds. However with
the maximum bonus of sixty five percent he would be paying
just one hundred and seventy five pounds.
For more details on your
companies’ particular scheme contact them for more information.
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