The bonus‐malus ladder

What is the bonus-malus ladder?

A bonus-malus ladder is a table that insurers use to determine the no-claim discount for your car insurance. The discount you receive has to do with the number of no-claim years you have. The discount you receive varies per insurer. The bonus-malus ladder is also called bonus-malus table, bonus-malus scheme, bonus-malus system or bm-ladder.

This is how the bonus-malus ladder works

The more claim-free years you have, the higher you are on the bonus-malus ladder. And the higher you are on the ladder, the more no-claims discount you receive. For every year that you have no claims, you move up one rung on the ladder. This means a bonus in the form of a higher discount on your monthly fixed charges.

So the bonus-malus ladder works as a kind of reward system. The more claim-free years, the higher the discount (bonus). The discount goes up to 80% on the basic premium of your insurance.

Effects of claims on your discount

Do you claim damage? Then you fall several notches on the no-claims bonus scale and receive less discount on your premium. With every insurer you always fall 5 claim-free years back on the no-claims bonus-malus ladder if you claim a loss.

If you claim multiple claims and thus drop down the bonus-malus ladder, you will receive less discount and sometimes actually pay a surcharge on the premium. This is called malus. This is the case, for example, if you claim more than one claim per insurance year.

Maximum number of steps

So the number of steps on the no-claims bonus ladder differs from one insurer to another. The step on the no-claims bonus scale at which you start is different everywhere. Have you accumulated 5 claim-free years? With one insurer you start on step 10 of the ladder and with the other on step 11.

Maximum discount on your car insurance

Like any ladder, a bonus-malus ladder also has a top step. If you are on this step, you have reached the top. This means maximum discount. You still build up claim-free years, but these no longer count toward the no-claims discount.

Maximum number of claim-free years

So people in the top step can have 15 claim-free years, but also 30. However, a maximum number of claim-free years has been established. Namely 99.

Getting your step from your insurer

Your car insurance company must let you know each year how many claim-free years you have. Therefore, your accrued claim-free years are listed on the insurance policy you receive each year from the insurer. In the bonus-malus ladder of your car insurance, you can see which step you are on, based on your claim-free years.

Negative claim-free years

So the moment you claim no claims, you get a nice discount on your premium. But what if you make several claims and fall so far down the ladder that you have a negative number of claim-free years? In that case you will not get a discount, but instead you will pay a surcharge on your premium.

Read more about negative claim-free years.

Malus registration

We also know the term malus registration. The Latin meaning of malus is "bad. You get a malus registration if you have accumulated negative claim-free years with your car insurance. You then have less than 0 claim-free years. For every claim you claim, you lose 5 claim-free years.

A malus registration causes your insurance premium to go up. It is also often difficult to undo this registration. Only after several years of driving without a claim is this possible.

Don't claim small damages to avoid falling back

In some cases it is better not to claim a small(er) damage with your insurer. For each claim and each insurer, you will lose 5 claim-free years on the ladder. Regardless of the amount of the damage. With minor damage, it is better not to file a claim and pay for the damage yourself.

Damage without fault

If someone else causes the damage to your vehicle, it does not affect the bonus-malus scheme. The insurer will then recover the costs from the party who caused the damage. Always take photos to prove that the damage was not your fault.

No-claim protector to keep discount in case of claim

When you take out your car insurance, you can take out no-claims protection. This means you can report 1 claim each year without reducing your no-claim discount.

Note that you do drop down the no-claims ladder. However, this does not affect your premium as long as you have the no-claims protection. Without no-claim protection, however, you will pay more premium for your car insurance when you make a claim.