No Claims Bonus


There has been a lot in the papers recently about the increase in the cost of insurance.  One of the effective tools to reduce your insurance costs is to get it discounted with a no claims bonus.  Essentially it will give you a reduction in the cost of your premium based on the number of years that you have been claim free.  This is the important expression held in each policy.  Essentially if you make a claim yourself (under your comprehensive policy) or somebody makes a claim against you then you will lose your no claims bonus (unless you have bonus protection).  Therefore, even if you are not at fault in an accident and an individual claims against you, you can lose entitlement to this discount.
Most insurers have a limit on the maximum number of years that you can avail of the no claims bonus discount and this is usually five or six years.

No Claims Bonus Protection.
Some insurance companies give the policy holder the option to protect this bonus for an additional fee to their premium.  This is something that I always recommend clients to take out.  It involves a modest fee of €30 or €40 but can be very significant if you are involved in an accident, particularly one where liability is disputed.  Essentially it will mean that your insurer may protect your no claims bonus only up to the value of a certain amount or numbers of claims per year.  For example you may be protected up to two claims in three years to a certain value.  It is however worth having.

Moving Abroad or Selling your Car.
If you move abroad or sell your car or don’t have insurance in your own name for a period of time, some insurers may not honour your no claims bonus when you reapply for cover if this period exceeds a certain amount of time such as two years.  You should check with your insurance provider to see where you stand on this matter, if you are thinking of selling your car.  It is important to ask your insurance company or broker questions about your bonus/discount when taking out cover.  It is important to plan for the long term of being a vehicle owner!