How to Keep No Claims Bonus Without a Car (Car Insurance)

How to Keep No Claims Bonus Without a Car

Have you ever asked yourself or your friend how to keep no claims bonus without a car? Well, you are at the perfect place to find the answer to such a question.

You probably don’t think about your claims bonus that much. After all, there are more exciting things to think about, right?

Well, if you plan to take a driving break, you must think about your no claims bonus. Why? Because it might not be valid when you decide to drive again!

So, how to keep No claims bonus without a car? If you had a five-year no-claims bonus and then didn’t drive for one year, your bonus would remain at five years. You should still be able to keep your existing no claims discount. If you do not drive for more than two years because you do not have a car or insurance, you will struggle to find a car insurance provider that considers your previous NCB – Generally, two years is the cut-off point; after that, you have to start again.

To transfer your no claims to a new car. you’ll usually need to provide proof of how much no claims discount you’ve acquired.

But don’t worry too much. We’re going to divulge everything you need to know about this potentially confusing situation, along with so much more.

Let’s start by looking at how no claims bonuses work. (Even if you think you know, it’s always worth having a refresher now and again!)

How Do No Claims Bonuses Work?

You get a no claims bonus by avoiding claiming for at least a year. You can reduce your car insurance payments by hundreds of dollars as you build your no claims discount.

The longer you go without making a claim, the larger the discount you receive. Of course, it’s capped at a certain point! Generally speaking, you can save around 50% on your premiums with a five-year no claims bonus.

To give you a clearer idea of how they work and the discounts you can expect, look at the example below:

  • Zero Years No Claims — $1,500
  • One Year No Claims — $1,200
  • Two Years No Claims — $900
  • Three Years No Claims — $700
  • Four Years No Claims — $650
  • Five or More Years No Claims — $450

If you’re more interested in the average percentage discount, look at the following list:

  • One Year No Claims — 5%
  • Two Years No Claims — 12%
  • Three Years No Claims — 15%
  • Four Years No Claims — 24%
  • Five Years No Claims — 25%
  • Six Years No Claims — 26%
  • Seven Years No Claims — 28%
  • Eight Years No Claims — 31%
  • Nine or More Years No Claims — 36%

However, it’s best to note that there are so many variables that go into the cost of your car insurance that the discount you receive year after year, thanks to your NCB, could be significantly more or less than the average.

Other factors that go into the total cost of your car insurance alongside your NCB are as follows:

  • Marital Status — While this only has a small effect, analytics show that married people are less likely to speed and often share driving duties, meaning they make fewer individual claims.
  • Driving Record — This probably goes without saying. But yes, your driving record follows you everywhere, including to the insurers! Everything from moving violations to at-fault accidents is considered. The more issues you have, the more you should expect to pay for your insurance.
  • Credit Score — Some insurers contend that your credit score relates to the likelihood that you’ll make a claim. However, California, Massachusetts, Michigan, and Hawaii have banned providers from using this metric to price car insurance.
  • Coverage Level — The more coverage you have, the higher the price. However, you shouldn’t simply go with the cheapest option if you actually need comprehensive coverage. That’s just a recipe for financial trouble! You can pick from a variety of coverages, including:
    • Collision and Comprehensive — Two distinct types of insurance that are usually sold as a package.
    • Uninsured Motorist Insurance — Optional in some states, requirement in others. It pays for medical expenses if you were hit by somebody without liability insurance.
    • Liability Car Insurance — Foundation of car insurance. Required in almost every stage. It pays for injuries and property damage if you cause a crash. If you’re sued, it pays for legal fees as well.
  • Car Type — Repair costs and theft rates for your vehicle type are calculated and thus, dramatically affect the cost of your insurance, especially if you have a luxury vehicle (e.g., BMW, Lexus, Cadillac, etc.).
  • Age — Young drivers pay more than middle-aged drivers since they’re a bigger risk. Although, it slightly rises again when you reach 65 and older.
  • Zip Code — If you live in an area with a high fire, flood, accident, vandalism, or theft rate, you pay more for car insurance.
  • Gender — Females typically pay less than men, especially when they are younger. However, it evens out when you hit approximately 35 years old.

Read also: Is Car Insurance a Waste of Money?

How Do You Keep Your No Claims Bonus Without a Car and Insurance?

As you know, you must have a complete 12-month period without claiming to increase your NCB.

So, if you had a five-year no claims bonus and then didn’t drive for one year, your bonus would remain at five years.

However, if you do not drive for more than two years because you do not have a car or insurance, you will struggle to find a car insurance provider that considers your previous NCB.

Generally, two years is the cut-off point; after that, you have to start again.

With that said, Keven Pratt, a consumer affairs expert, noted that you might be able to honor your previous no claims bonus if you decide to use the same insurer when you next purchase a car.

Although, they probably will reduce the number of years. But that’s much better than erasing it entirely.

Read also: How Much Does Car Insurance Go Down After 1 Year with No Claims?

What If You’re a Named Driver on Someone Elses’ Car?

Many people are under the impression that you can continue building your no claims bonus as a named driver.

But this isn’t true. Most insurers do not recognize named drivers in the same way as main drivers. However, there may be a rare few insurers out there that are willing to let you keep your NCB as a named driver — and even build upon it. 

Can You Protect Your No Claims Bonus?

Yes! You can safeguard your no claims bonus by paying an extra amount on top of your insurance premium.

That way, even if you end up making a claim, your NCB (no claims bonus) stays intact.

However, if you claim twice in one year, your protected no claims discount might reduce, depending on your insurance provider.

We suggest keeping in mind that protecting your no claims discount doesn’t necessarily keep you from paying a higher rate when you renew your insurance.

Since insurers consider the number of years without claims and how many claims you’ve made, your insurance might still increase.

So, protecting your NCB by paying extra isn’t necessarily worth it.

The Bottom Line

Ultimately, you are better off not taking a break from your driving career, to ensure your no claims bonus stays intact.

However, we are well aware that this can’t always be helped.

So, to end on an advisory note, we’ll give you two tips and tricks on how you can save money on your car insurance when you wish to get back in the driver’s seat:

  • Attend a Defensive Driving Course — Plenty of insurers offer discounts to people who complete a state-approved driving course. It’s very beneficial if you plan to get back into driving soon. You can mention it on your car insurance application to decrease the prices.
  • Shop Around — Don’t just go with your previous insurer! Make sure you get the best price out there. Comparison sites are helpful here.

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Marissa K.

Hi! I'm Marissa. A personal finance nerd, content writer, and Managing Editor. I'm here to bring you all the latest cool ways to save, make and invest extra money. So, helping you to live your dream life!

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