One of the main questions you probably have as a motor trader is ‘what is motor trade insurance?’ Of course, you know the basics – that it covers anyone working in the motor trade for risks involved with buying, selling or fixing cars as a service to paying customers – but what about the specifics, such as what exactly No Claims bonuses are and how they work.
What Motor Trade Insurance No Claims say
To an insurer, No Claims say that you are a careful or conscientious driver, who hasn’t had any accidents in previous years. This means that because you’re seen as more of a low risk driver, no claims bonuses help to reduce your premium, by as much as 50% from some insurers for a no claims bonus of five years. (However this will depend on the company).
What’s the maximum your No Claims can go up to?
Usually for every year that a driver has insurance and does not claim, they will earn themselves another year No Claims Bonus (NCB) to a maximum of 5 years. Any years after this won’t bring down your premium any more but it’s an option to safeguard the bonuses you have already earned by paying extra to protect our no claims bonus.
How much will I save on my premium?
What you will save on your premium thanks to your motor trade insurance no claims bonus will vary from insurer to insurer, but the average is as below:
1 year NCB = 20% reduction
2 years NCB = 25%
3 years NCB = 30%
4 years NCB = 40%
5+ years NCB = 50%
What types of cover can I earn on?
You can earn NCB on all types of insurance – from comprehensive, third party and third party fire and theft.
Can I protect my NCB?
You can pay to protect it so that in the unfortunate event that you had an accident, it would not affect your NCB. However, dependent on the insurer if you’ve had more than two claims, then you would probably not be able to protect it so soon afterwards if they were in quick succession of one another. And it doesn’t necessarily mean it will stop the premium rising the next year.
But the fact remains, even if you do have an accident which pushes your premium up, your NCB helps to provide you with a bit of a discount. It’s a complicated process to get your head around, but it could be worth having.
How does it affect my Motor Trade policy?
No Claims affects insurance policies by being applied to the premium during the stage where the insurer is calculating it – and not at the end. Each company will apply it at a different stage during the process too. They will base their calculations on very careful statistical analysis of claims, in their own way. And then they will take into consideration the market rate and providing a competitive rate to go alongside this. So it’s not as straightforward as you would think.
Can I lose my No Claims?
You should be aware though that unfortunately, you can potentially lose your NCB if there is a claim deemed as being fault– as if you’re hit by an uninsured driver, or have your car stolen, then you could potentially lose your NCB. In some circumstances, there is hope – if the insurer can claim all costs from another insurer due to the fact it was not your fault, then you wouldn’t lose your bonuses.
Can a named driver earn it?
Another plus point is that even though named drivers do not earn no claims bonus some insurers will allow a discretionary discount if the driver can prove they have been claim free for three years or more.July 24, 2014