A no claims bonus is a reward offered by insurance companies if you do not make a claim on your existing policy. For every year that is claim free, your premiums will become cheaper.
If you should have an accident, and have to place a claim with your insurance company, you lose your no claims bonus; this is because you would be considered a higher risk and as a result you would see your premiums increase.
There are some motor trade insurers who give you the option to protect any accrued no claim bonus. It is a service that comes at an extra cost, but would allow you to claim without affecting your bonus, and without in turn increasing your monthly premiums.
When you are looking into entering a new insurance agreement with a new insurance provider you also need to consider the following points to assess how the new insurer treats accrued no claims bonus, and then decide if they are the right insurer for you and your business.
Changing provider and transferring to a new insurer
It is important to clarify the stance that the new insurer takes towards accrued no claims bonus, as it can often be a bit unclear.
There are insurers who respect any no claims bonus that you have built up and will allow you to transport it across and continue on the new policy.
However, there are also insurers who are less willing to follow this way of thinking. It is always recommended that you fully investigate this point before entering into a signed agreement with a new insurer.
Just because a previous insurer allowed you to pay extra to protect your no claims bonus, it is not an indication that the new one will respect and honour your arrangement, so always check before committing to another annual contract of insurance
How to choose what employees should be named on the policy
The most important thing to remember when deciding which employees should be named on the policy is that they have the potential to affect your no claims bonus.
As your premiums are directly linked to the number of claims that are made, you will want to make sure that only safe, reliable and sensible drivers who are least likely to create a need to claim are place onto the policy.
Those that are over 25, no points on their licence, and no current claims against them, can often be more favourable and are a good way of keeping your insurance premiums lower.
A huge part of your expenditure when operating a motor trade business is insurance costs, and protecting any existing no claims bonus by making wise choices before implementing a new policy will ultimately save you a lot of money in the long term.
Contact us at Insure Motor Trade, to see how we can lower your monthly premiums without impacting on any existing no claims bonus accrued.
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