The no-claims bonus, or no-claims discount, is a vital part of any insurance policy for all but the youngest and most inexperienced drivers. It’s basically a reward for being careful, and knocks off some of the cost of a premium — in some cases a significant amount — for those who’ve not claimed on their insurance for some time. But can it be used on two cars?
Assuming you have a decent no-claims bonus, can you use it on more than one car, though?
Before we answer that, let’s first set down precisely what a no-claims bonus gets you. For the most part, the biggest reward of a no-claims bonus is actually felt in the first year. That sounds counter-intuitive — surely the rewards get bigger over time? — but it’s true. While different companies will have different rules, different offers, and different actuarial systems for deciding who gets an expensive policy and who gets a cheap one, the basic maths usually works out at a 25 per cent discount on the price of a given policy if you have one year’s no-claims bonus.
At two years, that will generally go up to 40 per cent, or thereabouts — a ten per cent reduction compared to the initial first-year discount. After that, generally it will go up in ten per cent increments, topping out at 60 per cent after four years. Beyond that, according to insurance experts, the no-claims bonus is generally not of much use as, actuarially speaking, the cost of your insurance is more about your age and driving experience.
This, incidentally, also calls into question the validity of the current fad for ‘no-claims discount protection’ where you pay a slightly higher premium cost for the sake of protecting your no-claims in the event that you do actually have to make a claim. A discussion paper produced by the Association of British Insurers shows that the cost of a no-claims protection is about 15 per cent of the overall policy cost, but most policies will keep your no claims in place in the event of one claim, sometimes two, within the policy year.
So, what about actually making full use of your no-claims bonus? Can it be used on more than one car?
The short answer is; no. It’s not quite that simple, though. Obviously, your no-claims bonus is quite flexible, and can be transferred from one policy to another at renewal time. To get the full low down, we turned to Jonathan Hehir, managing director at Insuremycars.ie, who said:
“You can’t use a no claims across two different vehicles but some insurers who want to write multi vehicle policies, such as insuremycars.ie, or for family policies, will give introductory discounts for already having a no claims bonus. This won’t give you the same discount as having a full no-claims bonus but at least you won’t be quoted as a first time driver.”
If all of this sounds rather complicated, then maybe it’s time for Ireland to look seriously at a national ‘no-fault’ car insurance system? Thankfully, we have a simple example to follow. New Zealand, which has a similar population (4.7-million) and actually has a slightly higher level of per-capita car ownership. It’s no-fault insurance model was originally introduced in 1900 for compensating those injured at work, and in 1928 it was expanded to cover third-party insurance for cars. Since 1974, New Zealand’s state-owned Accident Compensation Commission, or ACC, has been providing cover and recompense for all accidents and injuries across the two islands. The motoring side of the operation is paid for by a levies placed on the cost of fuel and New Zealand’s equivalent of motor tax, the ‘Motor Vehicle Licensing Fee.’ While the corporation and the acts of parliament that control it have been changed and altered over the years (occasionally allowing private insurers back into the market, before dismissing them again) since the seventies the ACC has collected the levies and fees, and paid out the compensation. The system has its critics, and there are still court cases and arguments brought before the Disputes Tribunal, but by and large, the national insurance system keeps a lid on things.
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