Car insurance ñ no claims

Bag a bigger bonus on your car insurance

For many the word ‘bonus’ suggests little more than a bottle of plonk at Christmas but for City types it means big bucks – though not so big this year it seems.

With the annual handout pretty much completed it seems that bonuses for City traders have dipped by as much as 40%. Predictably the credit crunch is to blame, and it’s those in the debt and credit markets that are worst hit.

We won’t be shedding too many tears, though. And for many of us the possibility of losing a no-claims bonus on our car insurance is more of a worry. While the credit crunch may not bite so hard at that particular perk there are still plenty of ways to see it disappear.

MoneyExpert.com gives some top tips on keeping that bonus intact, and the insurance premium in check.

Car insurance no-claims bonus – what’s it worth?

No claims bonuses obviously vary considerably from one car insurance provider to the next, but whatever the details they’re bound to be worth protecting. A bonus of five years or more can entitle drivers to a 60%-75% discount on your insurance, and with premiums rising consistently over the last few years that equates to a very decent sum.

Keeping the bonus

Unfortunately insurers pay little attention to whose fault an accident might have been, or indeed whether your car has been stolen when it comes to no claims bonuses. If you make a claim, no matter what the incident, you stand to lose some or all of it.

Clearly then it pays to avoid making a claim in the first place. If you’ve built up a decent bonus and then have a minor accident, it may be worthwhile not claiming the money for a new wing mirror, for example, thereby saving your no claims bonus and keeping your car insurance premium down.

Alternatively it’s worth investigating your insurer’s policy. Some may not take away the entire bonus if you’ve had a decent run. Instead they may merely ‘step it back’, effectively reducing it from five years to two, for example.

Your car insurance needs protecting too

If you’ve built up a decent bonus after five years of no claims it could be wise to protect it, by paying a slightly higher premium. Again the costs for the protection will vary from one insurer to the next so you’ll need to check the details.

It’s also definitely worth checking the small print as protection clauses can vary a great deal. With some insurers a so-called guaranteed bonus is available meaning it will be intact no matter how many claims are made. This, though, could add up to 20% to your insurance policy. More common (and cheaper!) is a protected bonus, that will allow you make one claim a year, but often no more than two in three consecutive years, without your bonus being affected.

The only way is up (sadly)

Unfortunately whether your no claims bonus is guaranteed, protected or sealed in an underground bunker there’s little way of keeping your car insurance premium in check if you have to make a claim. Insurers will always check your claims history when it comes to renewing your policy, and though they’ll be obliged to include the no-claims bonus there’s nothing to stop them jacking up the premium given that you now have a riskier profile.
Check out all the different features of car insurance premiums here, and find the right policy for you.

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