No Claims Bonus Protection

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 a number of 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 is an optional extra that you can add to your motor insurance policy; this benefit will protect the discount on your car insurance policy in the event 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 of time and/or the value of these claims. If the number of claims or cost goes above this criteria, you may lose your discount. 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, give the insurer a call, and they will go through the details with you.

There are two types, these are “Full No Claims Bonus Protection” and “Step Back Bonus Protection”.

What is 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 a claim. Basically, this cover will fully protect your discount.

What is Step Back Bonus Protection?

Step Back Bonus Protection is another type of 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 will offer you protection for a partial amount of the discount. It will not protect your full discount.

For instance, if you have built up a full six years No Claims Discount and you 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 this cover 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 on your policy and you 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. If you would like to find out more, give us a call on 042 935 9090 or get a quick online motor insurance quote here!