Whether you’re new to driving or have been a motorist for a number of years, you’ll know that car insurance is one of the largest expenses you encounter when taking to the roads.
When calculating your premiums, insurance companies take several different factors into consideration, from the age, condition and value of the vehicle you’re insuring, to the address at which the car is registered.
Another factor insurance companies consider which can help you save a substantial amount on insurance costs is the customer’s ‘no claims discount’, in this guide we’ll cover the no claims discount (often referred to as the ‘no claims bonus’) in detail, and learn how you can use it to your advantage.
A no claims discount is essentially a discount on your insurance costs based on how many years you have been driving without making a claim on a previous insurance policy. If the insurer sees that a customer has been driving for several years without a claim being made on the policy, they are statistically less likely to lose money on that customer, and therefore can offer lower insurance rates.
For each year the customer drives without a claim being made on their car insurance policy, insurers will give them a discount on the price of new policies. By driving sensibly and with due care and attention, drivers can accumulate no claims discounts and make more substantial savings each year.
Simply put, the more years you drive without a claim being made on your policies, the greater discount you will see in insurance premiums.
It is worth bearing in mind however, that the rate of discount offered and the number of years’ worth of accumulative discount offered to customers can vary between insurers; certainly worth having in mind if you have several years with no claims and are looking to switch insurers.
While it would be nice to live in a world without fibbing, insurance companies are among the more sceptical of businesses, so if you’re looking to switch insurers, you’ll want to gather proof of your no claims bonus.
Getting proof of no claims from your previous insurer can sometimes be a little confusing, because the process often varies from insurer to insurer. While there are often several avenues you can take with many insurance companies to gather the proof, it’s worth keeping some of the following methods in mind in case your previous insurer proves tricky:
Renewal Letters & Invitation Packs
When your current car insurance policy is approaching its renewal date, many car insurance providers will send out a renewal invitation pack or letter, stating the cost of renewing your insurance policy with them for another term, as well as an updated no claims discount figure. This document can be used as proof of no claims to your next insurer.
Some insurance companies such as M&S and Direct Choice only give updated proof of no claims upon request, so if you do not find proof of no claims on your renewal invitation or reminder, you may need to contact the insurer directly via a customer service line or online self-service centre. From there, you will either be sent a printable copy of your no claims proof, or sent the appropriate documents in the mail.
Certain insurers will send out a pack of final documents should the customer choose to cancel or not renew their policy; in some cases, this pack will include your proof of no claims discount. Be sure to check on this when you make the decision to cancel or not renew by calling the insurer or checking their online FAQ section.
After you’ve collected your proof of no claims discount it’s important to follow these strict guidelines when forwarding the details on to your next insurer; failing to do so could leave you uninsured.
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