Motor insurance can be one of the most costly aspects of owning a vehicle. Most new and used car owners will shop around every year in an attempt to lower the price of their insurance policy, often coming back to their original insurer in the hope they will offer to beat a cheaper quote.
As well as factors like the age of the driver, and the size of the vehicle’s engine, insurance quotes are also affected by the number of claims on a driver’s record. Therefore one of the best ways to save money on an insurance policy is to build up a no claims bonus.
The NCB provides a reduction on the cost of your insurance for every year passed without making a claim. By building your NCB, the average reduction to your premium will be around 65% after a five year period, so this is a perk well worth having! As a rule, your NCB is transferrable between insurers, so you won’t lose it by switching providers. The motor trade generally use specialist insurance companies and policies for their businesses, but they can still earn an NCB on trade plates.
If you are ruled to have been at fault in an accident, you’re likely to lose your NCB altogether, or certainly see it significantly reduced. If an accident isn’t your fault, and your insurer is able to claim the cost from the other party’s insurer, your NCB shouldn’t be affected. Your NCB could be temporarily suspended while the claim is finalised, however. It’s also possible to lose your NCB if an incident isn’t your fault. This can be through claims such as fire or theft, or if you’re unfortunate enough to be involved in an accident caused by an uninsured driver.
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The NCB can also present drivers with a big decision in the event of an accident which only causes minor damage. Claiming the cost of minor vehicle repairs can mean missing out on years of NCB. This can lead to some drivers deciding to cover repair costs to their vehicle, and even the vehicle of the other party involved. This is normally backed by an informal arrangement with the other party not to report the incident to either insurance company.
Many insurers will also offer the option of protecting an NCB. Whilst this adds to the cost of your insurance policy it means that in the event of a claim, you won’t lose the NCB discount you’ve built up over the years.
So is it worth paying the extra money to protect your NCB?
As with many aspects of insurance, this can feel like a gamble. It’s also worth considering that even with NCB protection, many other insurers will devalue your NCB by two years if a claim is made. Every insurer will use their own NCB scale when providing you with a quotation.
Remember, the motor trade have no rules governing how insurance companies handle the NCB scheme, so you should always check your policy. If there is no information about how many years’ NCB will remain following a claim, you should speak to your provider for confirmation.