What is no claim guarantee?
When taking out a car insurance policy, you can additionally choose for no claim guarantee. No claim guarantee is also called a no claim protector. With a no claim guarantee you can claim one claim from your insurer per year, without this being at the expense of your no-claim discount. If you take out a no claim guarantee, your monthly premium will increase slightly. In this article we explain how a no claim guarantee works and what the advantages and disadvantages are.
No claim guarantee: yes or no?
Are you still hesitating about taking out a no claims guarantee? Then it is wise to make a list of the advantages and disadvantages. The most important advantage is of course that you do not lose your no-claim discount and continue to pay the same premium. An important disadvantage is that you lose years of no-claim discount and do not build up years of claims-free insurance. This means that when you switch, you lose your no-claim discount and the new insurer will base your no-claim discount on your claim-free years. You will therefore probably pay a higher premium. This will probably also make you less likely to switch to another, perhaps more advantageous, insurer. Finally, you will of course pay more premium if you want to take out an additional no-claim guarantee.
Before you take out a no claim guarantee, it is wise to look at your insurer's bonus malus ladder to see how much premium discount you will receive. Your accumulated years without claims determine on which step of the ladder you start. If you have built up many claim-free years and are therefore high on the ladder, a no claim protector is of no added value. If you make a claim with the insurer, you will fall back a number of steps on the bonus malus ladder, but with most insurers the premium discount will remain unchanged because of your high number of claim-free years. For young drivers who have just received their driving licence, a no claim guarantee can be attractive. They have built up few or no claim-free years and no-claim discount, which means that the premium will increase considerably in the event of a claim.
What does a no claim guarantee cost?
The price for a no claim guarantee differs per insurer. Insurers also use different ways to calculate the costs. For example, with one insurer a no claim guarantee costs a fixed amount per month, while another insurer charges a percentage premium surcharge. There are also insurers who look at the number of no-claim years you have when determining the price. When calculating the premium for your car insurance, you can select no-claims protection as additional coverage. The calculation will then show you the costs directly.
How does a no claim guarantee work?
If you take out a no claim guarantee, you can claim 1 damage per year with your car insurer without this affecting the premium of your car insurance. You will keep your no claim discount in that case, but you will lose claim-free years. As long as you stay with your current insurer this is not a problem, but if you switch to another insurer you will lose part of your no-claim discount. An example:
You pay a monthly premium of €40 for your car insurance with your current insurer. If you make a claim with your insurer, you will lose years of claims, but your premium will remain the same. At that moment you do not notice anything of this. When, six months later, you decide to switch to another insurer, they will look at your claim-free years when calculating the premium. Because you have lost years of claim-free years, the premium will be higher, for example €55 per month.
We can be reached via Chat, Whatsapp, phone or email
Please feel free to contact us if you would like to know more.
We are here Monday to Friday from 08:00 to 18:00.