What is no claim guarantee?
When taking out car insurance, you can additionally opt for no claim guarantee. No claim guarantee is also called a no claim protector. With a no claim guarantee, you can claim one claim per year with your insurer without affecting your no claim discount. If you take out a no-claim guarantee, your monthly premium will increase slightly. In this article, we explain exactly how a no-claim guarantee works and what the advantages and disadvantages are.
No claim guarantee: yes or no?
Are you still unsure about taking out no claims guarantee? Then it is wise to list the pros and cons. The main advantage, of course, is that you do not lose your no-claim discount in the event of a claim and continue to pay the same premium. A major disadvantage, however, is that you do lose no-claim discount and do not build up any claim-free years. This means that when you switch, you lose your no-claim discount and the new insurer bases your no-claim discount on your claim-free years. So you will probably pay more premium. As a result, you will probably be less inclined to switch to another, perhaps more advantageous insurer. Finally, you will of course pay more premium if you want to take out an additional no claim guarantee.
Before taking out a no claim guarantee, it is wise to check the bonus malus ladder of your insurer to see how much premium discount you get. Your accumulated claim-free years determine on which step of the ladder you start. If you have already accumulated many claim-free years and are therefore high on the ladder, a no-claim-protector is not of added value. If you make a claim with the insurer, you will drop a few steps down the bonus malus ladder, but with most insurers the premium discount remains unchanged, because of your high number of claim-free years. For young drivers who have just gotten their driver's license, a no claims guarantee can be attractive. They have accumulated few to no claim-free years and no-claim discount, so the premium will go up considerably in case of a claim.
What does a no claim guarantee cost?
The price for a no claims guarantee varies by insurer. Insurers also use different ways to calculate the cost. For example, a no claim guarantee with one insurer costs a fixed amount per month, while another insurer charges a percentage premium surcharge. There are also some insurers who look at the number of claim-free years you have when determining the price. When calculating the premium for your car insurance, you can select no-claims protection as an additional coverage. In the calculation you will then immediately see the costs for this.
How does a no claim guarantee work?
If you take out a no claim guarantee, you can claim 1 damage per year with your car insurer without consequences for the premium of your car insurance. In that case you keep your no claim discount, but you will lose claim-free years. As long as you stay with your current insurer this is not a problem, but if you switch to another insurer you will lose part of your no-claim discount. An example:
You pay a monthly premium of €40 for your car insurance with your current insurer. If you make one claim with your insurer, you will lose claim-free years, but your premium remains the same. At that moment you won't notice anything. When you decide to switch to another insurer six months later, they will look at your claim-free years when calculating the premium. Because you have lost your claim-free years, the premium will be higher, for example €55 per month.
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