Every motorist knows that No Claims Discounts can seriously reduce the cost of their car insurance, but not many motorists know how they actually ‘work’.
What is a No Claims Discount?
A No Claims Discount (NCD) is essentially a reward for safe driving. For every year that you don’t make a claim you get a discount on the following year’s premium. The savings can be substantial making NCDs one of the easiest ways to cut car insurance costs.
Most insurers allow you to earn up to five years NCD although some allow you to earn up to nine years. If you change insurance providers you can usually transfer your NCD; thereby enabling you to shop around for the best deal.
If you make an ‘at-fault’ claim you will lose some (usually two years) or all of your NCD depending on your policy details. However, if another motorist admits liability your NCD will normally stay intact.
The deciding factor is whether your insurance company can recover their costs from the motorist responsible for the accident. On a practical level it means that you can lose your NCD even if the incident wasn’t your fault, for example: if your car is stolen or if your vehicle is damaged and the ‘guilty party’ leaves the scene without leaving their details.
Similarly if you are involved in an accident and the insurers are unable to decide who is at-fault, your insurance provider may be liable for your costs and it will affect your NCD .
Claims under the windscreen section of the policy will normally not affect your no claims discount.
Overall, the scale of no claims discount earned can make quite a change to your car insurance premium.
When completing your quote online, it is important to select the correct option for the number of claims free years that you have enjoyed.
For online comparison quotes from hundreds of different policies, log into www.insurescotland.com