No Claims Discounts (NCD) are sometimes referred to as ‘No Claims Bonus’ and are an online car insurance benefit many insurers offer. A discount is given to the policyholder when they renew their policy. It is based on the years they have had a policy with the same insurer and the years in which there have been no claims or accidents sustained under the policy.
What is a No Claims Discount?
No Claims Discount (NCD) is an incentive many insurers offer to people who have not claimed their car insurance policy. A discount on a car insurance policy is provided annually for each year in which no claim is made. The discount can help reduce the cost of premiums and cover up to 70% of the total cost.
NCD depends on the number of years a motorist has held car insurance with the same insurer. Therefore, it is only applicable when the policyholder has not made a claim during the annual period of their policy. Most insurers usually give NCD on a sliding scale, increasing the discount percentage each year up to a certain limit. The most common limits are 5 years (for a 10% discount) and/or 10 years (for a 20-25% discount).
NCD is also applied when a motorist switches between car insurance providers. On completing a switch, the policyholder can use their NCD as a bargaining tool to reduce the cost of the insurance premiums. In addition, the NCD can be used in combination with other offers and discounts provided by the insurer to get affordable auto insurance prices.
How NCD Affects Your Car Insurance Premium
NCD is one of the factors that can affect the premium of a car insurance policy. A lower NCD means you are more likely to pay higher premiums, and a higher NCD usually results in lower premiums. However, even a small increase in NCD can lead to significant premium savings, especially when combined with other discounts available.
Advantages of a High NCD
The main advantage of having a higher NCD is that it can lead to lower car insurance premiums. Having an NCD of 5 years or above typically means you are eligible for the best prices on car insurance. This is because insurers view a high NCD as an indication that you are a safe driver who is less likely to make a claim.
Having a high NCD also allows you to switch between car insurers without losing the NCDs you have built up. This can make it easier to shop around and compare deals at Miway.
No Claims Discount (NCD) is an online car insurance benefit that can reduce your insurance premiums. It is a discount that is given to the policyholder when they renew their policy based on the years they have had a policy and the years in which there have been no claims or accidents sustained under the policy.
In addition to reducing car insurance premiums, the NCD can provide flexibility and make it easier to switch between insurers. Through careful planning, drivers can take advantage of NCD and ensure they receive the best rates possible.