No Claims Bonus Protection
Firstly, a No Claims Bonus (also known as a No Claims Discount) is a discount that an insurance company will offer if you have not claimed in several years. A maximum discount is generally offered if you are 5 to 6 years claims free. This discount could reduce your van or car insurance premium by over 50%.
What is No Claims Bonus Protection?
“No Claims Bonus Protection” differs from a “No Claims Discount.” A No Claims Bonus Protection is an optional extra that you add to your policy; this benefit will protect the discount on your car insurance in case of a claim.
Criteria and limitations may apply depending on the insurance company. These limitations may include the number of claims you can make in a certain period and/or the value of these claims. You may lose your discount if the number of claims or costs exceeds this criteria. For example, if you make over three claims in two years or if the claims exceed a specific value outlined in your policy documents. Read the policy documents carefully. If you are unsure, call the insurer, who will review the details with you.
There are two types: “Full No Claims Bonus Protection” and “Step Back Bonus Protection”.
What is a Full No Claims Bonus Protection?
This benefit provides the top level of cover in the event of a claim. If you have this additional add-on, you will not lose your discount in the event of a claim. This cover will fully protect your discount.
What is a Step Bcack Bonus Protection?
A Step Back Bonus Protection is another add-on that will protect your No Claims Discount; this benefit is generally less expensive than the Full No Claims Bonus Protection. If you are involved in an accident and a claim is made against you, a Step Back Bonus Protection will offer you protection for a partial discount. It will not protect your full discount.
For instance, if you have built up a full six-year No Claims Discount and make a claim, the Step Back Bonus may reduce this to 4 to 5 years. In this scenario, you will not lose all your discount. However, your discount may be reduced from 50% to 25%.
Does a No Claims Bonus Protection come as standard?
No Claims Bonus Protection is an optional extra; you must pay an additional fee to protect your discount. This benefit is optional. However, if you decide not to include this benefit in your policy and make a claim, you may lose your discount. We suggest you ask customer support for a quote with this level of protection and without. This will give you a better idea of how much it will cost and help you decide if you want to add it to your policy. To learn more, call us on 042 935 9090 or get a quick online motor insurance quote here!