Car Insurance - Can Someone Explain What Is "No Claims Discount"?

LCentsAndSensibility on 16/03/2018 - 09:02

I'm purchasing car insurance for the first time (after buying my first car) and I'm unsure about what my "No Claims Discount (NCD) Rating" is.
There is a huge variation in the premium between the NCD Ratings. And when you ask for a quote on insurer's website, you just select from a drop-down menu whichever rating you are - it doesn't actually tell first time insurance holders what it means.

Is it determined by:
1) the number of years you have held car insurance in your name without making a claim, or
2) the number of years you have held your driver's licence without making a claim

I have held my fully driver's licence for 5 years and never made a claim. However, in that time, I've never actually held insurance under my name (always under my parents).

Any help would be great!

Automotive Car Insurance Insurance Ncd Rating

Comments

  • beeawwb on 16/03/2018 - 09:20
    +1

    It depends on the insurance company but most will treat it as number of years driving without a claim when taking out insurance with them. I.e. they'll apply it retroactively when you take out a policy.

    • mskeggs on 16/03/2018 - 12:02

      Most (all?) will allow time accrued with competitors too, or nobody would ever switch insurers.

      • beeawwb on 16/03/2018 - 15:56

        Correct, that's why I said "years driving without a claim" - it's regardless of if you're insured or not.

        But check with your insurer and always consult the PDS. :P

  • rhimes on 16/03/2018 - 09:28
    +1

    It's based on how long you've had insurance without claims. This gives you a discount for being a driver that's less likely to have accidents.

  • dazweeja on 16/03/2018 - 12:26

    And then it gets more complicated in that many insurers have "No claim bonus for life" once you reach the maximum no claim bonus. But that doesn't mean that if you make a non-recoverable/at-fault claim that your premiums won't go up - because they probably will - but that they'll apply the maximum discount before adding on the loading for the previous claim. Or it could be after, they can make up whatever rules they like.

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