What Is A No Claims Discount In Insurance?
Insurance is centered around risk. You pay your insurance and, in turn, extend your coverage should anything happen to you covered in the policy. However, when you don’t make a claim, you’re considered an excellent insured party and duly rewarded with a reduction in the cost of your auto coverage. That’s what’s commonly referred to as the No Claims Discount or NCD.
How Is No Claims Discount Calculated For Car Insurance?
As we’ve established, a percentage of the fee you pay for coverage is removed when you don’t file an auto insurance claim during a fiscal year. However, the exact way this discount is calculated will differ from insurer to insurer. But on the whole, the longer the number of years you can go without filing a claim, the higher your NCD will get.
What Happens To My No Claims Discount?
Like how NCD is calculated, this variable is also largely dependent on your insurance company. Typically, your NCD may be reduced by 2 to 3 years when you finally file a claim. So if you haven’t gathered that much NCD yet, you may lose your ability to claim this feature altogether.
Can I Transfer My No Claims Discount?
It isn’t possible to transfer NCD. It is because it’s a reward, and being able to transfer it to another person would defeat the purpose of encouraging people to be good drivers.
Does Windscreen Claim Affect My No Claims Discount?
While you will have to pay an excess if your windscreen gets chipped or damaged and you want to fix it, filing a claim for this will not affect your NCD in any way at all.
Does Theft Affect My No Claims Discount?
In most cases, theft or attempted theft doesn’t affect your NCD. However, in instances where your insurer may not be able to recover their outlay from another party involved, you may lose as much as two years from your NCD.
Does Flood Damage Claim Affect My No Claims Discount?
Again this depends. If you’re operating a standard policy, making a flood claim would most likely affect your NCD. However, in instances where you have special perils or flood coverage, there’s a chance that your NCD will go untouched.
How Long Can I Accumulate Claim-Free Driving?
It is another variable that’s entirely dependent on your insurance company. Most insurers will cap your NCD benefits at five years. However, some can push it up to 9 or even ten years.
Will I Lose My No Claim Discount If I Cancel My Car Insurance Policy?
No, you won’t. However, if you don’t renew your car insurance between 12-24 months after that, you will have to forfeit your NCD.
Does My Car Have To Be Insured To Keep My No Claims Discount?
In most cases, no, it doesn’t. It is because my insurers make provisions for a gap period. The length of this gap period will depend on your insurer.