What is a No Claim Bonus?
A No Claim Bonus (NCB), sometimes called a No Claims Discount, is a reward offered by many Car Insurance providers in Australia to policyholders who don’t make a claim during their policy period.
The longer you go without lodging a claim, the bigger the discount you can earn on your Car Insurance premium. It’s a simple way insurers encourage careful driving while helping you save money.
How Does a No Claim Bonus Work?
The mechanics of a No Claim Bonus are straightforward, but there are a few details worth knowing to make the most of it. Here’s how it typically works:
- Earning the Bonus: Each year you hold a Car Insurance policy without making a claim, you build up your NCB. Most insurers use a rating system, often starting at Rating 6 (no discount) and moving up to Rating 1 (maximum discount) over several claim-free years.
- Discount Levels: The discount percentage increases with each claim-free year.
- Rating Protection: Many insurers offer an option to protect your NCB, meaning one at-fault claim won’t reset your discount. This usually comes at an extra cost but can be worth it for frequent drivers or those with high premiums.
- Transferring Your NCB: If you switch insurers, most will recognise your NCB history, provided you can supply proof (e.g., a renewal notice or a letter from your current insurer). This portability makes it easier to look around for better deals without losing your hard-earned discount.
- Claims that Affect Your NCB: Not all claims impact your NCB. For instance:
- At-fault claims (where you’re responsible for the accident) typically reduce or reset your NCB.
- Not-at-fault claims (where another party is liable) usually don’t affect it.
- Claims for events, such as hail damage, theft or vandalism, often won’t impact your NCB, but this varies by insurer.
A No Claim Bonus is a chance to keep your insurance costs down. By understanding how it works and what affects it, you can make smarter choices.
Want to see how much you could save with your No Claim Bonus? Contact us at Tank Insurance and let’s find the best fit for you!
