Car Insurance No Claims Bonus - What Is Its Meaning?
This is the term that is commonly used in insurance industry
. Understanding the meaning of this common terms in the industry go a long way to affect your auto insurance rate. It is common for prospective insurance holders ignorance of some terms like this lead to loosing some money by not benefiting from their expected discount.
The term No Claims Bonus means the number of years that you have obtained a car insurance policy without making a claim. lets explain further, what we are saying is this, imagine that you got an insurance policy for your car five years ago and till date you had never been to your insurance company to make claim of any sort, be it for accident, damage or theft.
It means you have five years No Claim Bonus. This is a significant factor that play prominent role in your annual auto insurance premium rate. As the years roll by and you make no claim, then youre the number of years that you are entitled to No Claim Bonus increases.
In practice as every year roll by with your increase in the number of No Claim Bonus the cheaper is your car insurance premium. The reason for this is not far fetched. What it means is that in real sense is that you have a good track record of no claim. that means the cost of keeping your account is lower hence they have to pay you bank by giving a better insurance rate.
As a way of determining your car insurance rate, it is common of insurance firms that you may be changing (if you are changing insurance provider) to ask you for you to prove your No Claim Bonus. This could easily be done by collecting the No Claim Bonus from your present insurance company in the form of renewal notice or a letter.
It is worthy to note that if you accumulated years of no claims and if there is a claim, the car insurance firm has a way of recalculating your years of no claims. In times of quotation there are insurance firms like accept direct that may even offer to protect your no claims bonus for extra fee.
Having No Claim Bonus for several years is really a windfall of dollars. It may amaze you that sometimes you may save as much as 75% discount of your auto insurance fees from full No Claim Bonus.