Have you heard how up to 75% discount on your car insurance premium? No, a single company cannot be named that would offer you such discount. But the best part is almost all major companies offer you such discount if ‘you’ve been good’. Surprised? Read on to know how you can earn a major discount on your insurance premiums. If you are one of those who crib about having to renew your insurance because you never get into accidents, you should know about the No Claims Bonus which will help you to…well…not crib. While several factors affect the cost of your car insurance premium, there is not one single factor as effective as the No Claims Bonus in bringing down your premium charges. Put simply, No Claims Bonus is something you receive as a client with minimum risk of claiming vis-à-vis not getting into an accident or losing your car to a theft, etc. You probably already know that car insurance rates go up in case you ever got into an accident and placed a claim with the company. You will be charged higher premiums for up to three years after you placed your claim. This is because the insurance company deems that you are in higher risk of getting into accidents than the ideal customer. Though, the company does not attempt to recoup the amount paid up in claims, it definitely raises the charges up to 20-40% depending on the size of the claim.
No Claims Bonus works in the exact opposite way. If you have not placed a claim for a substantial amount of time, the company deems that you are in a lower risk factor of having to place one and reduces your premium costs, giving you a sizable discount. For example, if you haven’t placed a single claim in five years, you can avail the No Claims Bonus for those many years. If and when you are changing your insurance provider, you might notice that the new company requires you to provide the details of the No Claims Bonus from the previous provider. You can submit the same in the form of a renewal notice or you can fetch yourself a letter from your previous provider with all the relevant information and authentication.
But, you cannot always be sure that companies will retain your No Claims Bonus or that they will not knock off a few years off the bonus. Obviously, you will not be that good a customer if in fact; you have placed a claim after you received your bonus. But you never know what is coming for you and it is definitely not your fault if you bumped your rear or dented your car due to unforeseen circumstances. But, of course, the companies don’t see it that way. They increase your premium rates for at least a period of three years, or worse even, knock off some years off your No Claims Bonus since you are now in the higher risk zone.
You must know that there are ways to protect your No Claims Bonus. With a small additional fee, during the purchase of your policy, you can ensure that companies cannot take advantage of you having a bad fall. There are some good sites online and some agencies that help you place protection on your bonus. After all, if you always drive carefully, why should you pay the same amount for insurance as those who don’t?