We all love to save money where we can, and insurance is no different. Providers love to back a good bet, and will offer a reduced rate on certain insurance policies if you have a clean claims history. Read on and get your questions answered!
What is a No Claims Bonus?
A no claims bonus is a discount you earn on your insurance premiums. It accrues over time, increasing every year you are insured and do not make a claim on your policy, up to a certain level. You will earn a percentage for each year, for example 10% for one year without claims up to 50% for five years. Some insurers will give extra discounts for longer claim-free periods.
What happens if I need to claim?
Technically you will lose your entire no claims bonus if you have to make a claim. You may choose to compare the cost of savings lost to the cost of undertaking the repair work yourself and see which is cheaper. Some insurers offer bonus protection, so check on your policy schedule.
What happens if I move providers?
If you switch insurance companies your no claims discount can be transferred over to your new provider. You may have a PIN for this, or you will need to supply a copy of the document provided by your insurer. Insurers account for how many years in total you haven’t made a claim in, not just with the current provider. In other words, if you made a claim six months ago and made a claim, your new provider won’t consider you claim free even though you have never claimed with them.
What’s in it for the insurer?
The customer stands to save hundreds of euro, but no claims discounts are also designed to benefit insurance companies. No claims privileges discourage smaller, less serious claims, keeping handling and administration costs down for insurance companies. This in turn keeps prices competitive.
What coverage offers no claims discounts?
Car insurance has been offering no claims bonus to drivers for years, but it can also apply to home insurance.
No claims bonus and cars
- Named drivers cannot earn a no claims bonus, only the policyholder. However, if you have been named on a policy for at least a year, certain introductory discounts may be offered depending on the provider.
- You can protect your no claims bonus. For an additional cost, you can take out ‘Full Bonus Protection’ to leave your discount unscathed. You’ll need to be claim free and have the required level of earned no claims bonus to qualify, and some insurers limit the number of claims you can make. If your policy includes ‘Step Back Bonus Protection,’ then only part of your bonus is lost or ‘stepped back.’ The levels depend on your insurer.
- Usually, any no claims bonus earned outside of the Republic of Ireland cannot be transferred over to an insurer here.
- No claims bonus can only be used on one car.
No claims and home insurance
- A home insurance provider should offer you a no claims discount at the quote stage – this is different to a no claims bonus. It will apply when you first take out the insurance policy, and is based on the number of years you’ve had cover without making a claim.
- You can switch providers and still expect a discount for the total years that you have had insurance and not made a claim.
- No claims discounts are not standard and will vary between home insurance providers.
- Avoid risks at home, to avoid having to make a claim. Keep on top of repairs – any claim might be rejected if the insurance company suspects negligence.
Want to find out more?
If the choices seem overwhelming, enlist the help of an insurance broker to help you find the right policy at the right price. At Britton Insurance, our objective is to seek the best possible quotations available for our customers specific needs in the market. Our computer systems are constantly scanning the Insurance market for the most up to the minute quotes available in Ireland.