They call it a no claim bonus but it’s not an annual bonus that you get back in a lump sum. It’s basically a discount on your premiums. The more high risk you are the more you pay monthly. This is so that the insurance companies can cover the risk. If you are a low risk client then it’s more worth their while to insure you.
You need to have had full comprehensive insurance throughout the number of years you’ve been insured to qualify for a no claim bonus.
A no claim bonus is basically a bonus that all insurance companies award you for.
It is worked out on the number of years you’ve had insurance without claiming. So say you’ve had insurance for 5 years, and in that 5 years you have not submitted any claims then you will have a 5 year no claim bonus.
But now what happens if you have submitted claims previously.
Below is an example of how to work out your no claim bonus.
No Claim Bonus Example:
You’ve been insured for 5 years on full comprehensive insurance. Let’s say that in year 2 you had an accident and it wasn’t a lot of damage to your vehicle. Let’s say the damage was to the value of R1000 but your excess at that stage was R1500. You decided to fix the damages yourself instead of using your insurance because the damage was less that the excess. That means you didn’t claim for anything, which means it doesn’t affect your no claim bonus.
Then let’s say you had an accident in year 3. Lets say there was an excessive amount of damage to your car, lets say R10 000. This is quite a sum of money so you choose to submit a claim to the insurance company and the insurance company pays out and fixes your car. Then your no claim bonus is worked out like this…
Year 1 – No claim
Year 2 – Accident but didn’t claim
Year 3 – Major accident claimed from insurance
Year 4 – N claim and
Year 5 – No claim
Your no claim bonus is calculated from current to previous. IE. Calculated backwards from today. So let’s count using the above table, count back from year 5 to year 3 cause that’s when you last submitted a claim. So your no claim bonus would count as a 2 year no claim bonus. When you get a quote from an insurance company you will get a discount equivalent to 2 years without claiming.
Every insurance company has different discounts for each year without a claim so it’s difficult to say how much discount you’ll receive for each year of not claiming.
And that’s how a no claim bonus works.