Do I need no claim bonus car insurance?

You can earn a no-claim bonus on your car insurance by driving safely for multiple policy periods. Discounts for staying claim-free can save you up to 30% on car insurance rates.

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UPDATED: May 25, 2020

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Here's what you need to know...
  • Insurance companies are now offering special policies to young drivers under 25 who demonstrate good driving
  • If a young driver has not filed any claims, he is eligible for discounted insurance called “no claims bonus” insurance
  • No claims bonus car insurance can offer up to 30 percent off of insurance premiums

No claims bonus car insurance options help young drivers save money on auto insurance.

Being young certainly has its advantages, but low-cost premiums for car insurance is not one of them. The good news is, if you’re a young driver with a good driving record, you may be able to find cheap insurance.

Try our search tool for online car insurance quotes by typing your zip code in below!

Why the need for no claim bonus car insurance?

Young drivers under the age of 25, especially males, are considered to be the highest risk to insurance companies. With the higher risk come higher premiums.

Young drivers pay some of the most expensive car insurance premiums in all the industry.

The cost of owning and maintaining a car is high enough. Adding insurance premiums can be an expensive proposition for young people who do not have a steady income.

Insurance companies have begun implementing no claims car insurance program which can result in premium reductions of as much as 30 percent for young drivers with a clean record.

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How does no claim bonus car insurance work?

For obvious reasons, a young driver just starting out is not eligible for no claims bonus car insurance. In many cases, drivers must demonstrate a year or more of a driving history before being eligible.

That’s usually not a financial problem for 16-18-year-old drivers because they stay on their parents’ policy while in school.

However, when eligibility does begin, the insurance provider starts monitoring performance.

For every policy period that expires without a claim being made, the insurance company may offer a reduction in premiums.

30 percent off of insurance premiums will not be offered right up front. Rather, that reduction is accumulated over many policy periods.

With enough claim-free policy periods, the young driver could earn a significant reduction after just a few years of safe driving.

Is earning no claims bonus car insurance worth it in the long run?

Being a safe, young driver and earning no claims bonus car insurance privileges has an added advantage very few people think about.

Consider the fact that premiums typically rise 10 to 15 percent for any driver, regardless of age, after he makes a claim or is found guilty of a violation.

By being a safe driver, not only is the young person eligible for no claims bonus car insurance, he is also preventing rate increases that result from accident claims or traffic violations.

With the cost of car insurance as expensive as it is, these insurance savings accumulated over a lifetime of car ownership can be quite significant.

Being a safe driver regardless of age always pays off in the end. In the case of no claims bonus car insurance, the car insurance companies are attempting to encourage the riskiest of drivers to stay safe.

Can no claim bonus car insurance be extended after age 25?

While these specialized car insurance policies are aimed at younger drivers, insurance companies also know the value of safe driving among their older customers. As a result, some are offering the same incentives to older drivers.

However, older drivers will notice that the reductions are not as great because their premiums are cheaper to begin with.

The amount of the reductions applied to the no claims bonus car insurance for older drivers will vary from one insurer to the next. These incentive policies should be considered whenever drivers are searching for new or better car insurance.

If you’re not the safest driver on the road, there’s no better time to turn over a new leaf. After a period of time with no claims or violations, you may be eligible for your own no claims bonus car insurance policy.

Find instant car insurance rates online by entering your zip code in our search tool!

References:

  1. http://www.moneysupermarket.com/car-insurance/blog/why-is-car-insurance-for-young-drivers-so-expe…
  2. https://www.moneysupermarket.com/car-insurance/no-claims-discount/
  3. https://www.esurance.com/info/car/myth-older-drivers-always-pay-more
  4. http://www.consumerreports.org/cro/car-insurance.htm?searchToken=comparing%20car%20insurance

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