What is the meaning of no claim?
No claim actually literally means no claim. The meaning of no claim has to do with claim-free years. Insurers reward damage-free driving by means of a discount on the premium. We also call this discount no-claim discount. The more claim-free years you build up, the more discount you will receive on the insurance premium. Do you make a claim with the insurer? Then you lose part of your no-claim discount and start paying more premium again. In this article we explain what no claim means exactly.
No claim discount meaning
No-claims discount is the discount you get on your car insurance premium. For every year that you do not claim against your insurer, you get 1 claim-free year. The more claim-free years you build up, the more no-claim discount you get. So in this way, an insurer rewards you for claim-free driving.
It is always wise to check first whether it is better to claim a loss or pay for it yourself. For each claim you will lose 5 free years, regardless of the amount of the damage. You will immediately drop a few steps on the bonus malus ladder, and your premium will increase significantly. It then takes another 5 years before you reach the same level of discount as before the damage. Therefore, for small damages with a low claim amount, it may be more advantageous to pay for the damage yourself instead of claiming it from your car insurer. Often the premium increase that occurs when you claim is higher than the total claim amount of a small damage.
No claim protector meaning
A number of insurers allow you to purchase no-claim protection. With a no-claim protector, you can claim one claim per year without an immediate increase in your insurance premium. However, there is a disadvantage to no-claim protection. You keep your premium discount, but you lose a number of claim-free years. This means that if you want to switch insurance, you will have to pay a higher premium. So you are actually tied to your current insurer. Nevertheless, it can sometimes pay off to switch to a cheaper insurer and temporarily pay more, especially if the discount is high in the coming years.
What does damage mean for my no claim?
Claiming car damage comes at the expense of your claim-free years and your no claim discount. If you are liable for someone else's damage, your insurer will reimburse you. However, it also comes at the expense of your claim-free years. There are some damages that do not come at the expense of your no-claims. These are all damages that fall under the limited insurance part of your car insurance. For example, damage caused by fire, storm or hail, broken windows, theft of the car or a collision with stray animals. If you have car damage caused by someone else, you can recover the damage from the other party's insurer. Even in this case, your no claim remains intact and you will not lose any claim-free years.
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