UK Motor Insurance Clauses - No Claims Discount

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Policy Clauses - No Claims Discount

Often called a no claims bonus, the NCD is very popular. It has been around for decades and some people can get very upset about it. Indeed, there can be a lot of money at stake.

All insurers have scales which make your premium cheaper the longer you go without making a claim, until you reach the maximum on the scale. This is often 65% or sometimes 70%. Every insurance company scale is slightly different. The bottom line is: what is the premium I have to pay? A 65% discount with one insurer might work out a better bet than a 70% with another insurer.

A few years ago, free 'protection' was introduced but if you want to protect your bonus now you have to pay an extra premium. Whilst the scales and the details of the schemes might vary from one insurer to another, the claims aspect is essentially the same. It is a No Claims discount, NOT a no blame discount.

Claims staff will 'allow' your bonus, that is, keep it intact, if they make a full recovery of their outlay. It is as simple as that.

So if your car is stolen and no money is recovered from the culprits, tough! You will lose your discount - you have made a claim and received the benefit of your policy.

If your car is damaged by a 'hit and run' driver, tough!

If the accident was partly or entirely your fault, tough. Your insurers will have paid out and protected your interests but you lose your bonus.

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Subject to any protection you have on your bonus and how this works on your policy, one claim will usually step back your bonus rather than reduce it to nil. But make more claims and..........you've guessed the rest.

One final point to bear in mind, when your renewal comes up and you receive the bad news about your renewal premium, most insurers will allow you to repay the claim if this is a cheaper option.

"I was sure the old fellow would never make it to the other side of the road when I struck him."

Extracts taken from actual claim forms submitted to a number of UK car insurance companies

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