No Claims Bonus Benefits for Cheap Auto Insurance

Insurance companies allow the insured to avail a no-claims bonus (NCB) discount on premiums of auto insurance when they do not lay claim for that financial year. The discount does vary from company to company. But speaking in potential terms, a NCB discount over a period of 5 years can bring down the premium by 60-70% making the phrase cheap auto insurance really meaningful. The idea behind this is not only to ensure that the customers renew the policy each year, but avoid claiming unreasonably and unnecessarily and thus benefit through discounted premiums. The period of NCB also differs from company to company for instance some companies may provide the discount for 5 years only after which the regular premium becomes applicable while some may extend the discount for a further 2-3 years after the initial 5 year deal. These terms are generally specified at the beginning of the insurance plan and hence when you are shopping for new auto insurance, you must find out all about no-claims bonus option.

However no-claim bonus should not be misunderstood for no-blame / no-fault bonus, in the sense that irrespective of whose fault it is or who was to blame for the accident once you lay a claim you will lose the NCB option. For instance if your car is stolen when you were out of town and you make the insurance claim, you lose the no-claims bonus. There are some companies that provide NCB protection for additional fees, but this being a new concept it is treated differently by various companies and should be made clear right from the beginning.