No Claims Discount

Having your own car makes life so much easier than waiting for buses that frequently don't turn up on time as well as the convenience your own car brings. People rely on their car to get them to work and back, dropping the kids off at school, shopping, visiting family and friends as well as days out. Where would we be without it? However, keeping a car on the road doesn't come cheap particularly with the rising cost of petrol and car insurance. Motorists are always looking at ways to reduce the amount they have to spend on car insurance cover. All cars must have at least third party insurance which will cover the owner should they have an accident as well as a third party should someone else be involved. Third party fire and theft will cover if the car gets on fire or sets some other person's car on fire. Also if your car is stolen you will be covered for the current value of the car at the time of the theft. Fully comprehensive insurance covers for almost everything from a broken windscreen to protecting your no claims bonus.

Having protection of the no claims discount is very important as this discount will reduce your yearly insurance premium considerably. A no claims bonus builds up and is offered by insurance companies as a reward for not making a claim against the insurance. The longer a person is insured without making a claim the more the no claims bonus will be. All insurers work differently when it comes to no claims bonus but the maximum number of years to get a 65 – 70% discount is usually five. After one year you usually get a 10% discount off your yearly premium, 20% for the second year, 30% for the third year and 50% for the fourth year. Having a no claims bonus makes a big difference to the amount of the yearly premium you will pay. When comparing insurance quotes always make sure that the quote includes protection of your no claims bonus. What might seem like a very good quote at first glance might not be quite so good if it doesn't include covering the no claims bonus. Always read the small print of any quote before making a decision and check what other customers have to say about any potential insurer. If a quote doesn't include protecting the no claims bonus then it could be worth while paying extra to be covered.

Motorists can soon build up a no claims bonus by driving carefully and safely thus avoiding the risk of an accident. Young drivers and new drivers are encouraged by Insurance Companies to drive more safely by being offered a rapid bonus scheme. As car insurance for young drivers is very expensive this is also an incentive to help them reduce their yearly premium. A rapid bonus scheme for young drivers means that they can build up a no claim discount in a much shorter time usually ten months. Young drivers and new drivers are seen as a much bigger risk by Insurance Companies and this is reflected in the premium they have to pay. Encouraging them to drive more carefully and avoid accidents is beneficial to all concerned as young people cause more accidents in the first twelve months of driving than any other age group.

Summary

Anyone taking out car insurance should make sure their no claims bonus is protected. Having built up a no claims bonus over 5 years can considerably reduce the cost of the yearly premium. It is often worthwhile paying extra to protect the no claims bonus than having to pay a bigger insurance premium should you have an accident. A no claims bonus could be worth as much as 70% of your premium so it is important that your insurance covers this bonus.