September 29, 2010
When you are involved in an accident your no-claim bonus is affected as a result of your bad judgement or wrongdoing. But what happens when it's not your fault? RateCity looks into what happens to your no claim bonus for comprehensive car insurance.
Myth No.4: If I made a claim for something that wasn't my fault, I shouldn't lose my no-claim bonus.
True. Generally this is true but it depends on your insurer and their terms and conditions.
For instance, Virgin Money states that their comprehensive car insurance members won't lose any of their no-claim bonus when they make a window glass claim, or when involved in a collision that is entirely the fault of the other driver and the driver is identified. For any other claims, they may reduce your no-claim bonus at renewal.
ING Car Insurance also state that your no-claim bonus will not be affected if they conclude you weren't at fault and if you can provide full details, such as the name, address and car registration of the person at fault. If the claim you made was for damage that was caused by a natural occurring event, such as a storm, then your no-claim bonus will also not be affected.
No-claim bonus explained
No-claim bonus or NCB is the discount given on your car insurance premium as a reward for not making any claims. It is calculated according to the number of years of driving experience as well as your claims history. So for each year you don't make a claim, your no-claim bonus increases, until it reaches the maximum discount of 60 percent (also called "rating one").
If you are involved in an accident where you were at fault, once you make a claim your no-claim bonus will basically renew itself so you essentially start from the beginning.
Protect your no-claim bonus
There is a way, however, to protect your no claim bonus regardless of who is at fault.
When applying for comprehensive car insurance, most companies give you the option of protecting your rating. You may have to pay extra to have this included in your policy but basically it allows you to make a certain amount of claims in a specified period without it affecting your rating.
For instance, Budget Direct and Virgin Money both offer protection to customers with top level or rating one no-claim bonuses. This protection allows them to make a maximum of two car insurance claims over three years, with one claim per 12-month policy, or up to two claims over three years without it affecting their rating.
Budget Direct and Virgin Money also offer a rating one "for life" if you don't make a claim for two consecutive years, which means any car insurance claims you make thereafter won't affect your no claim discount protection.
Always ask for a product disclosure statement (PDS) to see how your no claim bonus is affected when you make a claim regardless of who is at fault. Or compare car insurance quotes online to see how much it will cost to ensure your no claim bonus is protected.