What is a No Claims Bonus and Why is it so Important?
What is a No Claims Bonus and how does it affect my insurance costs? How do I build No Claims and make sure it’s protected when someone else is driving my car?
For some drivers, building a No Claims Bonus (NCB) is the key to keeping the cost of car insurance down. NCB is built by making no claims on your insurance, and having no claims made against you, year on year.
NCB is usually only available to policy holders and can be lost if there is a claim on the policy. The good news is that if you have your own car, you can protect your NCB when others are driving it!
How does No Claims Bonus work?
With each year of No Claims Bonus you earn, you gain an additional discount usually up to 9 years. One year NCB can result in around a 7% discount growing to 40% when you reach 9 years. Bear in mind that this totally depends on the insurer and can be much lower or much higher.
Overall, NCB is valuable as it can save you money on car insurance. It can also make roads safer as drivers aim to keep claim free, which is better for everyone!
Claim where claim is due
Each driver on an insurance policy must report any previous claims. The policy holder must also be honest about how many years NCB they have. If you take out a new policy and request a quote with five years no claims bonus, you must be able to prove this. Even if you had an accident where you were not at fault, this could still affect your No Claims Bonus.
Detailed information and data about claims is easily shared between insurers. Do not get caught out: be honest. Equally, if you have no claims, make sure your insurer sends proof at the end of your term. If it is not sent, you can ask your insurer to do so.
Benefits of No Claims Bonus
Many people, particularly young drivers, choose not to have a car for financial reasons. University students are likely to opt out of car ownership, and many other young drivers choose not to own a car due to the running costs. It can therefore be difficult for new and young drivers to build No Claims Bonus. It is common for these drivers to become a named driver on a parent’s car insurance. However, named drivers don’t usually earn NCB. Additionally, this can still prove expensive and if the named driver does not use the car for months on end, the higher annual premium is unnecessary.
Temporary cover is therefore proving a major trend with families who want to run one or two cars, and insure a whole gang of occasional drivers. Car Sharing Insurance provides an easy and straightforward solution that allows drivers to borrow a friend or family member’s car from 1 hour to 30 days.
The good news for the car owner is that if you lend your car on Admiral’s Car Sharing Insurance and the driver makes a claim, your NCB is protected.
Whether you’re a car owner willing to lend your vehicle to a friend, family member or colleague, or whether you’re a driver looking for a car to borrow, Car Sharing Insurance can arrange a convenient and flexible policy for you.