Driving Safe can also Save Your Money! Learn about No Claim Bonus

By Sakshi Srivastav - 07 Jul 2021 Last Updated: 22 Oct 2021
Driving Safe can also Save Your Money! Learn about No Claim Bonus

You've probably come here because you have a car insurance policy and are curious about your No Claims Bonus, which is a reduction offered by your insurance carrier for each year without a claim.

This discount is available while renewing your policy, and if you switch from one insurer to another, you will receive a no-claim discount certificate from the previous insurer. It is the most dependable method for lowering your insurance rate. What is a No Claim Bonus, exactly? How it can help you save money and how you can keep it up over time?

Thus in this blog we will answer all the questions you have regarding No Claim Bonus. So without any further ado, let’s learn.

No Claim Bonus in Car Insurance – What are they?

If you don't file a claim, you can get a no-claim bonus on your auto insurance. For every year of driving without a claim, you normally get a one-year no-claim bonus. So, if you go five years without filing a claim, you'll get a five-year no-claims bonus applied to the base cost of your auto insurance.

Discount on No Claim Bonus

The insurer determines the premium discount offered on NCB. The highest discount offered is based on the total number of years you did not file a claim, which can be up to 20%. Some insurance companies offer up to a 50% discount on premiums, depending on the driver's profile. The amount of money saved grows with time.

When is the No Claim Bonus provided to you?

The no-claim bonus can be claimed at the end of the policy or before it is renewed. The terms and conditions of NCB are entirely determined by the insurance companies.

  • NCB can be continued with your past record at some firms even if you move insurance providers, while at others it will be a fresh start.
  • Some insurance companies impose a limit on how many claims can be filed without affecting the NCB discount, while others don't.

How do I use the No Claim Bonus that an insurance policy provides?

The majority of insurance companies provide NCB as an add-on to your current policy. This is to safeguard any coverage that has not been claimed. When using the NCB add-on, insurers impose a premium surcharge.

What are the advantages of receiving a no-claim bonus?

There are various advantages to receiving a no-claim bonus which are explained below for a better understanding-

advantages of receiving a no-claim bonus

CLAIM & NO CLAIM ADVANTAGE

You might be concerned that filing a claim will wipe off your years of no-claim bonus. You should be aware that filing a claim reduces the reduction on your next auto insurance rate, which impacts your claim bonus. It will not, however, reduce your no-claim bonus to zero.

THE ABILITY TO CHOOSE

The top worry for cautious drivers is losing their no-claim benefit when switching insurance companies. Don't be concerned! Before determining your auto insurance price, your new insurance company will evaluate your claim-free years.

PREMIUMS ARE LOWER

Each year that you go without filing a claim lowers your auto insurance premiums in the UAE. A no-claim bonus might save you up to 20% on your car insurance price.

CAN BE TRANSFERRED

Many people are unaware that a no-claim bonus can be transferred. The no-claim discount can be applied to your second vehicle. If you buy a new car, your no-claim bonus will be transferred to the new car, allowing you to get auto insurance at a lower price.

Who offers a no-claim bonus?

According to the UAE Insurance Authority's new standards, a safe driver in the UAE is eligible for a no-claims discount of up to 20%. Your insurance company will give you a no-claim bonus if you don't file a claim on your automobile insurance during the length of your policy.

How Do I Choose a No-Claim Bonus?

Some motor insurance firms in the UAE provide protection against no-claims discounts. It's an add-on coverage that you can add to your current auto insurance policy.

After making a claim in the previous year, you must pay an additional premium to protect your no claims benefit. This varies per insurance provider and is subject to the terms and conditions of the policy. Some UAE auto insurance companies may allow you preserve your no-claim bonus even if you make many claims (up to a certain limit) in a year, while others will limit the number of at-fault claims you can make.

Important Points to consider

  • You can only get a No Claims Bonus if you renew your policy.
  • The car, not the insured, is used to determine the No Claims Bonus.
  • If you're purchasing insurance for two vehicles, you can use your No Claims Bonus to the second vehicle as well.
  • If you are at fault and your insurer is responsible for the loss, your entire No Claims Bonus, or a portion of it, may be enhanced.
  • If it's a no-fault claim, the insurer may seek reimbursement from the third-party insurer, with no impact on your No Claims Bonus.

It goes without saying that each vehicle insurance provider has its own set of rules and restrictions when it comes to the No Claims Bonus. The discount rates differ as well. Before making a selection, it is essential that you check with insurers and compare various vehicle insurance quotes.

How does No Claim Bonus assists you in saving money?

Every year, the no-claim bonus accumulates, and the greater the number of claim-free years, the greater the discount. Did you know that a no-claim discount might save you up to 20% on your vehicle insurance premium? According to the UAE Insurance Authority, an insured who has not made a claim in the previous 1 to 3 years is eligible for a 10% to 20% discount when renewing their automobile insurance in Dubai.

If you're lucky and have an excellent driving record, some auto insurance providers in the UAE may offer you a no-claim discount of up to 50%, depending on your age, career, and customer record, among other things.

What happens if you file a claim?

Most people believe that if a claim is filed in the prior year, the no-claim discount will be negated. During policy renewal, however, vehicle insurance providers limit the proportion of no claim discount. Because there is no set procedure for calculating this premium reduction, it differs from one insurance carrier to the next.

Even if you file a claim for an accident or other unforeseen occurrence, your no-claim bonus is preserved. As a result, it's a good idea to double-check with your auto insurance company.

Is it possible to transfer your No Claims Bonus?

The insured car receives the no-claims discount, not the driver. When switching vehicle insurance companies, you can transfer your no-claims bonus. According to the new laws established by the UAE Insurance Authority, you will receive a 'No Claims Certificate' from your prior insurance company at no additional expense.

How can I receive an insurance company's no-claims certificate?

You should call your existing insurance provider and request a copy of your No Claim Certificate. They will then give you with the same as per your specifications.

No Claim Certificates – What are they?

A no-claim certificate is a document that verifies that you are a safe driver and, as a result, a dependable client for your insurance company. This no-claim certificate qualifies you for a no-claim bonus, which lowers the cost of your car insurance. This certificate can be used to renew or switch your vehicle insurance provider.

Who gets the No Claim Certificate?

There is no such thing as a good deed that goes unrecognized! A no claim certificate is issued to any policyholder who does not file a claim throughout the insurance period. You will rarely need to file a claim on your vehicle insurance if you are a safe driver with a clean driving record. When you don't file a claim on your automobile insurance, your insurance company makes money. This profit is distributed to loyal clients in the form of lower auto insurance rates.

Conclusion

We can conclude with the fact that No Claim Bonuses are a viable aspect of your Car Insurance. If used wisely, you can save a significant amount of money through No Claim Bonuses and can also extract maximum value from your Car insurance. We hope this blog provided you incite full information which you can use to your benefit. For information on other related aspects of Banking, Insurance etc, feel free to check out our Website also.

 

Motor Insurance Related FAQ

Frequently Asked Questions

  • What is a Vehicle Insurance Plan's Validity?

    An auto insurance policy lasts for a year and must be renewed every year. If you fail to amend your contract, you will be given a one-month grace period to renew your auto insurance policy. This ensures that your plan's status remains active.

  • Third-Party Liability Insurance: What Is It?

    If you purchase third-party liability coverage, you will be covered for losses to a third party if your car is involved in an accident. It offers compensation in the event of a loss of life, physical injury, or material damage to a third party as a result of an accident caused by your vehicle.

  • Is Car Insurance Needed in the United Arab Emirates?

    To legally drive a vehicle in the UAE, we must have Car insurance.

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