What Does No Claims Bonus Mean?

Posted on August 16, 2023

A no-claims bonus is where a driver receives a discount on their premium based on the number of years they’ve held a car insurance policy without making a claim. The more years you’ve had without an accident, the higher the discount you’ll receive. Only the person who has taken out a policy in their name can earn a no-claims bonus.

Usually, the max number of years that you can receive a no-claims bonus is 6 years. Your no-claims bonus does not increase further after six years, as this is the maximum discount. Therefore, whether you have 8 or 15 years of no claims, your bonus will be the same. You can receive a reduction of up to 67% on your policy with a full no-claims bonus.

If someone claims you, you will lose your bonus. If you’re involved in an accident where you are not at fault, your insurance company may pay the fees until the case is settled. Once it’s established that you are not at fault, your bonus will remain the same without being reduced.

But what happens if you are in an accident that is your fault? Normally your bonus is reduced, which might result in you paying higher premiums on your insurance. However, nowadays, most insurers provide the option of protecting your bonus.


Full No Claims Bonus Protection

You will usually have the option to protect your no-claims bonus when taking out your insurance policy. You can protect your bonus by paying an additional fee on your policy, even if you make a claim. This means that you will still receive the same discount despite making a claim.

It’s essential to read your insurance company’s terms and conditions when taking up no-claim protection, as some companies apply limitations.

These may include restricting the number of times you can claim your no claims are affected. It is also worth noting, that despite having no claims protection in place, some insurance policies will still take the number of accidents you have been in into account.

Step Back No Claims Bonus Protection

Step back no protection is where a policyholder protects part of their bonus. For example, where you’re at fault in an accident, instead of losing your full five-year bonus, you only lose two years and ‘step back’ to having three years no-claims bonus.

Can You Keep Your Bonus If You Are Off the Road for a while?

If you’re travelling or taking a break from driving, you may lose your bonus if you are off the road for two years or more. Call your insurer to determine how long they allow before rejecting an old no-claims bonus.

Has Your No Claims Bonus Expired? 

Your No Claims Bonus may have expired after moving abroad or a lapse in your car insurance coverage.

Are you aware that your no-claims bonus may have expired if you have a gap of 2 or more years in your car insurance cover? Many drivers in Ireland are unaware that if they do not have an insurance policy in their own name in Ireland for more than 2 years, they may lose their entire no-claims bonus. This affects drivers living abroad (even if they have been driving abroad) or those insured as a named driver instead of having a policy in their own name.

no claims bonus expired

What happens if you have a gap in your car insurance cover?

Having a gap of 2 or more years in your insurance cover may make it difficult to get a car insurance quote, while some insurance companies may even refuse to insure you! By having a full NCB, drivers can receive discounts of up to 70% so it is understandable that drivers returning to Ireland are feeling frustrated when they no longer receive these discounts despite their clean driving record. A recent article in the Irish Times, described the difficulty a driver returning from the Netherlands had trying to get car insurance after his NCB had expired. The driver was quoted up to €3,000 in some instances, despite having a clean driving record. 

The Impact of NCB on Premiums

A full NCB can significantly reduce your insurance premiums. For instance, a driver with a six-year NCB could receive a discount of up to 70% on their premium. This substantial discount highlights the value of maintaining a clean driving record.

Transferring NCB: Can You Move It Between Providers?

One common question is whether the NCB can be transferred between insurance providers. The answer is typically yes. Most insurance companies will honour an NCB earned with another provider, but it’s always good to check beforehand.


How to get Covered?

KennCo Insurance is very happy to provide you with a quote even if you have a lapse in your car insurance cover. We take driving abroad or driving as a named driver into account, so you don’t miss out on our great discounts if you’re a safe driver. As mentioned in the recent Irish Times article,

Kennco Insurance – not the coffee – in Rathfarnham in Dublin proved to be the only reasonable company that was willing to overlook the no-claims bonus going slightly over two years. They insured me – the policy underwritten by Lloyds – and provided the necessary letter of indemnity for €715. They were kind and patient on the phone too – it makes a difference.”

If you plan on getting your car back on the road in Ireland, call KennCo Insurance for a quote today on 0818 25 20 25.

What will you need?

If you’re returning from abroad or switching from a named driver experience to a policy in your own name, you will need proof of your driving history. 

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