No claims bonuses are rewards for not making a claim on an insurance policy. This means that over time premiums become cheaper, reflecting the lower risk associated with the driver. No claims bonuses are available to drivers in the motor trade just as they are with private insurance, though there are some differences.
Motor trade insurance is available to dealers of new and used cars, mechanics, body shops, hire companies, accessory fitters and similar trades.
Potential Discounts
In the motor industry, no claims bonuses can result in some hefty discounts – typically 20% after the first year, 25% after the second, 30% after the third, 40% after the fourth, and an impressive 50% after the fifth year. Typically this is the maximum discount offered by insurers.
Protecting a No Claims Bonus
If a driver with a no claims bonus has an accident and has to put in a claim, unfortunately the discount is often lost, resulting in higher premiums. As can be seen from the above, this could even result in your premiums doubling.
However, this doesn’t have to be the case – by paying slightly more, it is possible to protect your no claims bonus and keep premiums down in the event of a claim.
Switching Insurers
With domestic insurance, it is possible to switch insurers and retain your no claims discount. But is this true of trade insurance? Fortunately, the simple answer is yes. If you’re looking to switch policies, you can transfer your no claims discount to another provider.
Remember that this will only apply to the road risks element of the policy under a combined insurance policy.
Transferring your discount is easy. You simply need to get a letter of confirmation from your current provider, stating the level of no claims bonus.
Your new insurer will then apply the appropriate discount. Always check the terms and conditions of any such arrangement with your new insurer before switching.
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Applying a Domestic No Claims Bonus
It is also possible to apply a discount earned from a domestic policy to a trade policy, which is useful if you are only just setting up trade insurance and have a good bonus on your private insurance. Your insurer will be able to advise you further on this.
Which Employees to Insure
Remember that, as with domestic insurance, the people named on your policy can affect your no claims bonus and the cost of your premiums.
Only insuring safe and reliable drivers, those with no current claims and no points on their licence, will help to keep costs down. As with domestic insurance, drivers over 25 are also considered a lower risk.
