Car Insurance Tips: How to Save Off 60% (Part Two)
Step-Back
If you have to make a claim, most insurers will ’step-back’ your discount, typically by two years. So let’s say you have a four year no claims bonus which entitles you to a discount of 60%. After a claim your discount would be cut to 40%, which is the typical discount you would receive after two consecutive claim-free years.
For this reason it’s worth avoiding a claim if the costs involved aren’t much greater than the excess payable under your policy. It could be more beneficial in the long run to pay the costs yourself to preserve your bonus.
You can pay extra to protect your discount, although this is usually only possible once you have already built up a full no claims bonus. By paying a higher premium for your insurance, your discount will be unaffected by future claims. Recent analysis has found that, on average, a protected no claims bonus adds around £31 to your annual premium.
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