Insurance is a pool of people grouped together to share a risk. This has an effect on rates, as the more accidents are reported, with more claims that are paid out, the higher premiums can be for everyone – even if you personally have not submitted any claims. It can seem unfair. Responsible driving deserves recognition and most insurance companies are taking notice by offering a No Claim Bonus or No Claim Discount.
The rules may vary by carrier, but generally, for each year you remain a safe driver with no accidents, you can receive a discount. The discount increases by a certain number of years until it reaches a maximum level which can amount to substantial savings. The maximum level is determined by the individual company, but is usually about 5 or 6 years.
Of course, even the safest drivers can have an accident. If you haven’t filed many claims in a certain number of years, a lot of insurance companies in Australia offer protection for your No Claim Bonus, meaning you won’t lose your No Claim Bonus for one accident. Of course, rules and guidelines may vary by insurance company, and there may be a limit on the number of claims you can file before endangering your No Claim Bonus, so you’ll want to check directly with your company to see how it applies to your situation.
Even if you’ve made it to the point where you’ve reached protection for your No Claim Bonus, it’s important to take steps to remain a safe driver. Drive carefully and be sure to mind speed limits. Keep up on your cars maintenance and be sure your tyres are properly inflated and have good tread. Keep your windows clean for maximum visibility, and possibly most importantly: stay focused. Texting or making calls on your cell, fooling with radios, navigation systems and DVD players or just plain not paying attention puts more than just your No Claim Bonus at risk – it endangers yourself, your passengers and other drivers on the road.
It is always a good idea to read the Terms and Conditions, and Product of Disclosure given to you when you purchase your policy. This will make sure that you have a broad overview about everything that you are paying for. If there is something you are not quite sure about, or don’t understand, be sure to contact the customer support line.
If you have a good driving history but aren’t receiving a No Claim Bonus, be sure to check with your insurance company on their eligibility requirements for the discount. There could be a mistake preventing you from receiving a discount you’ve earned. If you’ve recently started your policy with a new insurance company, you may still be eligible if you can prove you had no claims on your prior policy. It never hurts to ask!
