No Claims Bonus

A no claims bonus is essential to reducing the cost of your car insurance. For each year that goes by without you claiming on your car insurance, you gain a no claims bonus. The amount of no claims bonus you can accrue will be subject to a maximum which will vary depending on car insurance provider. The maximum number of no claims bonuses you can have is usually between four and five; this means that once you have built up this many no claims bonus your car insurance premium will remain the same, as opposed to decreasing which it does for the first four or five years. Some benefits of having a no claims bonus include:

Discounts of up to 75 per cent off your premium
Some companies allow you to protect it for an additional charge
If you get a second car and get a mirrored policy, you can get your no claims bonus on the new car too

If you find yourself claiming in the event of an accident, you may lose some or all of your no claims bonuses, making your insurance premium rise and putting you back to square one. However, some car insurance companies now offer no claims bonus protection as an extra when you take out car insurance with them. This means that if you find you have to make a car insurance claim, you will not lose any of your no claims bonuses.