Vehicle insurance is often a grudge purchase for us all, but when the time comes and it is needed, we're thankful to have it. But if we pay diligently each month and never find ourselves in the position of claiming a loss, are we entitled to some rebate? The answer is yes and it comes as a No Claim Bonus (NCB). AutoTrader is not an insurance provider, nor are we experts in the particulars of the insurance industry, with the information contained within this article coming from research and consultation of insurance companies. For more specific information, please consult your insurance provider.
Related: What is comprehensive insurance?
What is a No Claim Insurance Bonus?
In South Africa, a no claims insurance bonus, also referred to as a no claims discount (NCD) or no claims bonus (NCB), is a reward insurance companies offer to policyholders who go without making any claims during a specific period. This period is typically one year, but it is not uncommon to see cash-back incentives after three years of no claims within a local context. However, this can vary among insurance providers.
How Does it Work?
When you renew your insurance policy without filing any claims during the designated period, you may qualify for a no-claims bonus. This bonus is commonly applied as a discount on your insurance premium for the following policy year or as a cash bonus. The longer you maintain a claims-free record, the higher your no-claim bonus, resulting in increased savings on your insurance premiums.
Accumulating No Claims Bonus
No claims bonuses in South Africa are often cumulative, increasing incrementally each year that you refrain from making claims. For instance, your first year without a claim might result in a 20% discount, which could rise to 30% in the second year and so forth. Some insurers may offer accelerated bonus programs that allow you to earn a higher discount in a shorter timeframe.
Transferring NCB Between Insurers
In South Africa, transferring your accumulated no-claims bonus when switching insurers is generally possible. This means that if you decide to change insurance providers, you can bring your existing no-claims bonus with you and continue enjoying the associated discount on your premiums.
Protecting Your NCB
Certain insurance policies in South Africa offer an option to protect your no-claims bonus. This means that even if you need to make a claim, your bonus remains unaffected, and your discount is preserved. However, conditions are typically attached to this protection, such as a cap on the number of claims permissible without losing the protection.
