No Claims Bonus
The no claims bonus is a valuable incentive offered by the insurance companies to drivers who have not made a claim on their motor insurance policy during the year.
After driving for five consecutive years without making a claim on his motor insurance policy the driver is eligible for his no claims bonus. The insurance companies can allow a no claims bonus discount of anything from 50% to 70% off the insurance premium so it is worth shopping around for the best deal. Should the driver wish to change his insurer to take advantage of the best deal most insurers will allow the driver to transfer the discount. So as this is such a valuable asset it is worth bearing in mind not to make claims for the five consecutive years for relatively small items such as scratches or dents. Establish how much it would cost to repair and if possible pay for the cost out of your own pocket. Once the no claims bonus has been received it is possible to protect it by paying an additional premium. This means that should the driver be involved in an accident or wish to make a claim for damage to his car he will not lose his no claims bonus. As with any motor insurance policy the insurer will have exclusions and may limit the number of claims that can be protected after which the driver could lose his no claims bonus and have to start all over again to build up the same. Remember too that in order to keep the cost of insurance down companies often have an excess e.g. £100 clause in the policy. This means that the driver will be liable for the first £100 of any claim from his own pocket. This clause is also inserted to prevent claims for minor damage.
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