All you need to know about No-claim bonuses and discounts
In Thailand, a no-claim bonus and discount can save you a lot of money on your car insurance premiums. Find out more about how they work and how to obtain them.
What Is No-Claims Bonus and Discount?
A no-claims bonus, also known as a no-claims discount, is a percentage discount your insurer gives you to reward you for not filing for a claim on your car insurance policy in the years that had gone by. The discount can grow yearly if you don’t file for a claim.
If you have no claims of at least 5 years or more, you may get a huge discount on your premium, though this can differ between insurance companies, the maximum discount offered by some companies can be as much as 70-75%.
Key Points
- No-claims bonus is a reward by your insurer.
- No-claims bonus and discounts are transferable.
- Discounts pile up each year you don’t file a claim.
What Are the Benefits of No-Claims Bonus and Discount?
No claims bonus and discounts provide numerous benefits. These include:
- Saving Money – No-claims bonus accumulates over time, the longer you wait to file a claim, the greater your discount will be.
- You Can Take a Break – If you cancel your car insurance policy, you don’t have to worry about losing your no-claims bonus. You can regain it when you insure your vehicle again, as long as the expiring date of your previous policy is within two years of the start date of your new policy.
- You Can Take It With You – You may take your no-claims bonus with you when you purchase a new car or change insurance companies.
What Affects No-Claims Bonus and Discount?
You may lose some or all of your no-claims bonuses if you file a car insurance claim. Even if the accident you’re claiming for wasn’t your fault, you could lose your bonus. However, in some cases, if you’re hit by another car and weren’t at fault, your insurer should be able to reclaim the payout from the other car’s insurer. Your no-claims bonus will not be affected in this case. If the fault can’t be agreed on, insurers of both drivers may need to split the cost of the claim, which will affect both drivers’ no-claims bonus. Claims due to other reasons, such as a windscreen replacement, may affect your no-claims bonus.
No-claims bonus increase for every consecutive year that you don’t file any claims.
Can You Transfer Your No-Claims Bonuses?
When you change car insurance providers, you can transfer your no-claims bonus and discounts to the new insurance company. If you’ve taken out your contract, your new insurer will ask you to provide proof of your claim-free status. They can raise your premium price or cancel your coverage if you can’t provide any proof.
Here’s how you can prove your claim-free status:
- Provide the annual renewal letter showing that you have made no claims.
- Call your old insurer and request documentation to be sent by post or email.
Transferring your no-claims bonus allows you to carry over the benefits without having to start from scratch every time you change insurance company. However, keep in mind that you won’t always see perfect continuity. Different insurer means different no-claims bonus schemes and rules.
A no-claims bonus of five years or more may give you a big discount on your premium.
How Do I Build My No-Claims Bonus?
You’ll earn another year’s no-claims bonus for every year you are insured without filing a claim. Some companies may offer accelerated policies, which enables you to earn a bonus every 10 months instead of 12. Most insurers may only use a maximum of 5 years when they work out a discount, although you can build up an unlimited number of no-claims bonuses.
Tips for No-Claims Bonus and Discounts
Here are some tips on how you can make the most out of your no-claims bonus and discount:
- Accelerated Bonus – Younger or less experienced drivers, who usually pay higher premiums than older, more roadworthy drivers, may benefit from acclerated bonus plans. Some insurers have accelerated bonus plans that allow you to receive your first year’s discount in 10 months rather than 12, essentially doubling your savings.
- Protecting Your No-Claims Bonus – You can pay an extra to secure your no-claims bonus if you want to. This helps you to make several claims in a year without compromising your no-claims bonus and discounts.
- Shop Around – Instead of staying with the same insurer at renewal, you can shop around to get the best rates and benefits.