What is No Claim Discount
All van insurance companies offer No Claim Discount (NCD) on their insurance policies but what does it actually do?
No Claim Discount is the number of complete years that you have been driving without making a claim - it is not whether you have had an accident or not.
What does the "Discount" part actually give you though? Basically it is a discount that the insurance company gives you off the gross premium - the actual percentage that you can get depends entirely on the insurance company you choose however it can be up to 75%.which can make a substantial difference to your premium especially when it goes down after an accident.
No Claim Discount was specified by the Association of British Insurers as typical rates
1 year = 30% discount
2 consecutive years = 40%
3 consecutive years = 50%
4 or more consecutive year = 60%
However individual insurers can vary these guidelines and often do.
Fault and Non-Fault claims
It is important to remember "fault" is not indicative of blame - fault is indicative of whether the insurance company made a loss on the claim or not.
Claims are categorised as either fault or non-fault by insurers - there is no grey.
This is why you can have your van stolen after securely locking it up yet this would be considered a fault claim because the insurer cannot get their money back from anyone.
|
Keeping your No Claim Discount
No Claim Discount is built up over consecutive years of insurance where your insurer effectively doesn't have to pay out on your behalf where they cannot recover the money.
However the likelyhood is that you will, at some point, need to make a claim on your van insurance. So what can you do to keep your premiums low?
1. Protect your No Claim Discount
Most insurers will allow you to protect your No Claim Discount if you have built up sufficient years - usually 4 or 5+ years - but this will increase your premium. However it is usually well worth it because the percent discount you could lose if you make a claim will usually increase your premium by far more than the cost of protecting it.
By protecting your NCD you will be able to make a fault claim without losing any of your No Claim Discount. However the amount of claims you can make is limited so it is worth reading the small print.
2. Do you need to make a claim?
If the damage to your van is minor decide whether it is really worth making a claim to repair it. However you must ensure the van is still road worthy so if you are in doubt always get it looked at by a professional since a small nudge in the rear of your van may look like it has only dented the bumper but it could bend the van's frame.
When deciding on whether its worth making a claim work out how much it will cost to repair the van then work out what it will cost in increased premiums if you lose some of your NCD - usually the step back is 2 years worth of percent i.e. using the ABI guide on the left if you had 3 years NCD (50%) and you made a claim you would have 1 year NCD (30%) so your premium would go up by 20% in the first year and 10% in the second year.
3. Paying back a claim
If you do have to make a claim, it may be worth finding out how much the insurer paid out and if you can afford to, you could offer to pay the cost back to the insurer.
|
