Understand Your No Claims Bonus

Imagine the following scenario. You've been driving soundly for the last 5 years. You've had to make no claims and fortunately there's been no claims made against you either. Your no claims bonus has reached its peak and you're now the beneficiary of a nicely reduced premium, allowing you to spend that extra cash on other more rewarding pursuits, such as shoes!

Then the unthinkable happens. You accidentally back up into your neighbour's shoddily parked banger. Or you return to the shopping centre and discover that your pride and joy has been rear-ended and its wing mirror is missing.

What does this mean for your no claims bonus? Will you lose it? Will your premium increase? If you've been in an accident, it's natural to have lots of questions, so to shed some light on the matter we've put this post together about the different types of no claims bonus available:

Full no claims bonus

A full no claims bonus means that you'll receive a reduction in the cost of your premium based on the number of years you've been claim free (sometimes up to 50% less). Do bear in mind that a claim made on your policy, even if it isn't your fault, could mean losing your hard earned bonus and would almost certainly mean a price hike from what you have been accustomed to paying.

No claims bonus protection

One way to safeguard yourself against such a catastrophe would be to protect your bonus. No claims bonus protection shields your bonus even if you have to claim. There are three types of protection usually offered by insurers:

• Full no claims bonus protection

  This usually means you won't lose your no claims bonus, even if for example you have a number of fire and theft claims or any two claims within three years, as long as the total claim doesn't exceed a certain amount.

• Step back no claims bonus protection

  If you have this type of policy and have to make a claim, you would lose part of your no claims bonus, but you wouldn't lose it all. For example, if you had a 50% no-claims bonus, it could be stepped back to 30%. Some insurers offer this type of protection as a free add-on to their policies.

• No claims bonus protection for fire and theft claims

  This means that you wouldn't lose your no claims bonus in the event of a fire or theft claim.

It goes without saying that the only truly effective way to protect you, your car and your no claims bonus is to drive safely, be smart about where you drive and park and be careful about who you name as a driver on your policy.

To find out more about car insurance and what benefits you can take advantage of, why not contact one of the team here at Chill on 01 4003400