What does bonus malus mean?
Claim-free years are years that you do not claim a claim with the insurer. For every year that you do not claim, you get 1 claim-free year. By driving damage-free, you receive a discount on the insurance premium. The more claim-free years you have, the more no-claim discount you get. To determine exactly how much no-claim discount you will receive, insurers use the bonus malus system. But what exactly is the meaning of bonus malus? You can read it in this article!
Bonus malus meaning
Bonus malus comes from Latin and means good (bonus) and bad (malus). Bonus malus rewards 'good drivers' and punishes 'bad drivers'. The longer you drive without damage, the more discount you get on your premium. Do you cause an accident? Then the premium increases (malus). The amount of the bonus malus affects the insurance premium for your car insurance. When insurers talk about bonus malus they often talk about the bonus malus system or the bonus malus ladder. This system is used to determine exactly how much premium discount you will receive. They can also use this to determine how much the premium increases in the event of a claim.
Bonus malus ladder meaning
A bonus malus ladder is a table that insurers use to determine the no-claims discount for your car insurance policy. The discount you receive is determined by the number of claim-free years you have. The ladder, like a real ladder, consists of tiers. The higher you are on the ladder, the more no-claim discount you receive. Each insurer has its own bonus malus scheme. As a result, there may be differences in discount between different insurers. You can find the bonus malus arrangement of your insurer in the policy conditions of your car insurance.
Malus registration: what is that?
As mentioned, the Latin meaning of malus is 'bad'. We also know the term malus registration. You will receive a malus registration if you have accumulated negative claim-free years on your car insurance policy. You then have less than 0 claim-free years. For every claim you make you lose 5 claim-free years. If you claim more than one claim and thus fall on the bonus malus ladder, you do not receive a discount but pay a surcharge on the premium. This is called malus. This is the case for example when you claim more than one claim per insurance year.
When does the bonus malus expire?
Claim-free years are not valid indefinitely. After termination of your car insurance, claim-free years remain valid for 3 years with most insurers. Before those 3 years are over, you have to take out a new insurance policy where you can use your accrued claim-free years. If you do not do this, the claim-free years expire and you start all over again. Also negative claim-free years usually expire after 3 years.
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