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Losing your NCB over frivolous claims – is it worth it?

A no-claims bonus (NCB) represents the number of years in which you don’t make a claim against your vehicle’s insurance policy.

It’s a ‘reward’ from your insurer that discounts the rate at which you pay for your insurance. Your insurer reviews your NCB on the renewal of your policy every year. The amount it’s worth varies from insurer to insurer, but an NCB of five years or more is likely to give you a bigger discount on your monthly premium.

Therefore, one of the best ways to save money on your insurance policy is to build up your no claims bonus (NCB). By building up your NCB, the reduction to your premium could be around 50% after a five-year period, so it’s a perk well worth having.

As a rule, your NCB is transferrable between insurers, so you shouldn’t lose it by switching providers.

Why small claims can cause a bigger loss down the line …

While it’s tempting to make a claim every time your vehicle sustains minor damages, take a moment to think about your NCB. If you make a claim on your policy where your insurer pays out, you’ll lose some, or all, of your no-claims bonus. Following a claim, your premium is also likely to increase as your insurer will use your claims history to calculate your premium.

By not claiming from your insurance on smaller claims, you could end up saving a lot more in the form of a direct discount on your next year’s premium. Something to consider when next you rush to claim for a minor bumper bash that you could pay to have fixed yourself.

To find out more about your NCB, feel free to call Melissa on 044 382 0550.

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