No claims car insurance

By Mozo ·

Did somebody say: No claim bonus? What does that mean anyway? Here’s a scenario: 

You didn’t make a claim this year on your car insurance policy and... Boom! You’re entitled to a B O N U S. And that’s what no claim bonus means in a nutshell.

So for every year you don’t make a claim, the more your discount increases, and the less premium you pay. Think of a no claim bonus or NCB as a reward for being awesome. Not just that, but a great driver. A safe driver. A patient and conscientious driver.

Think back to all the times someone else's driving peed you off - ahem, we mean made you slightly cranky - and instead of honking rigorously, shouting something out the window and responding negatively, you remained calm and cool, then went on about your driving peacefully. And you felt better for it.

Often, negativity caused by other drivers can escalate and turn into something nasty, where a negative domino effect takes place, sometimes leading to an accident. If you don’t let someone else's bad day or awful driving skills pour into your day and driving experience, then you remain more in control and less of an emotional driver. Who is also a safe, calm, patient and conscientious driver. See? Staying cool really pays off. And you get rewarded by your insurer for it. Anyways, who wants to pay excess unnecessarily. Pffft to paying excess, and yay to safer driving.

Want to learn more on no claims bonus and other features? Read Mozo’s Car insurance features and benefits here.

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Car Insurance Comparison - last updated December 04, 2020

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How is my NCB discount calculated?

Let’s clarify something now. No claim bonus can also be referred to as ‘no claim discount’ and ‘safe driver discount’. But how is it calculated? It’s usually dependant on the type of license you hold, the history of your driving record and how many years you have not made a claim on your car insurance.

Below is a guide for full license holders. Remember, this is a guide only and the discount and calculations will vary between insurers:

Years without claimAverage discount
15% to 20%
210% to 30%
320% to 40%
430% to 60%
5+65%

Frequently asked questions about no claim bonuses

My no claim bonus is excellent. Can I protect it?

We don’t blame you for wanting to hold onto something that’s good and hard to beat! Some insurers will offer a feature at an additional cost that protects your no claim bonus. After working so hard at being an exceptional driver, you’d want to hold onto that discount!  

But you need to ask what the exclusions are. You may be covered without paying excess if someone who isn’t insured hits your car or someone rear-ended your car at a shopping car park and didn’t leave a note with their details. But will you be covered if you’re at fault in an accident? That’s something you need to double check.

What will affect my no claim bonus?

Someone else caused a road accident:

Here’s one thing for certain - if you’re involved in a an accident and not at fault, then your NCB remains intact and the other party’s insurance will cover the cost to any damage to your car. Even if the other party does not have the appropriate car insurance, your insurer will likely cover the the image on your behalf without affecting your NCB, but that’s something you’ll need to double check with your insurer.

You caused an accident:

Well it all depends on how much damage is caused to your car and possibly the third party. If it's a minor repair, then perhaps your NCB gets affected by downgrading your discount. If your car is deemed a write-off and your insurer needs to pay it out or replace it, it’s likely that your NCB will be reduced or eliminated. Not to worry, it won’t be long before you build up your NCB again. Remember: if your NCB reduces, it probably means that your premium will rise. So to quote Mozo’s driving morals again: stay calm, breath and think twice.

The fault is shared:

In the event of an accident where the fault is not blamed on any one particular party, then both insurance companies of each party are likely to share the cost, 50/50. Will your NCB be affected in this instance? Likely. But it won’t wipe it out. It may reduce your discount but rest assured, your NCB something you can build up again. Remember, every year you don’t make a claim, your no claim bonus discount will increase.

What if my car gets stolen or damaged by poor weather?

You’ll be pleased to know that your insurer will likely be lenient and compassionate toward your untimely misadventure. After all, it wasn’t your fault, right? What’s more, your NCB should remain intact.

As a young driver, how can I improve my NCB?

You may find that you may not be receiving the same level of NCB discount as your full license holder friends and family, but that’s probably because you're currently observed at a safe distance. It just means that you need to wait a short while to prove to your car insurance company that you’re a safe driver and worthy of a reward or discount on your insurance.

Remember, drivers under 25 are recorded to have the highest rates when it comes to road tolls and accidents. So until you can prove yourself…

Just one more thing: it may be worth your while to look into completing a ‘safe driver course’. Sending through your successful completion certificate to your insurer shows that you’re serious about your driving future on the road, and about being a conscientious and patient driver always alert and ready for any unforeseen situation. Power to you! And potentially more dollars in your pocket from the potential savings on your future NBC discount.

So the moral of the story? Avoid accidents by driving safely, not emotionally, always. That way you can hold onto your NCB for longer. Simple.

*Any information provided on this page should be considered a summary and general advice only. All information should be verified before purchase via the relevant Product Disclosure Statement (PDS).

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