No Claims Discount

Accumulating a no claims discount significantly reduces the cost of you car insurance premiums. So how does this bonus system work and what benefits does it bring.
The theory behind no-claims discounts

Car insurance premiums are based on an assessment of risk - the lower the risk you pose to the insurer the lower your premiums will be. If you have never made a claim before or you have driven for several years without making a claim then a car insurance company is likely to see you as a safer driver and as such will charge you less for cover.

Effectively you are rewarded for not making a claim through a no claims bonus which reduces your premiums. Your discount is usually calculated as a percentage of your premium and can be built up year after year up to a certain limit - usually 65 - 70%.
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How does a no-claims discount work?

Every car insurer will calculate a no-claims discount in its own way. Generally there will be a no-claims bonus schedule that indicates how much discount you are likely to receive. The maximum number of years you can build a discount for will also vary, but will generally be set at five.

So, as an example, you may earn a 10% discount for being claim free for one year; a 20% discount after two years; 30% after three years; 50% after four years; and a maximum of 70% after five years.

As the savings that can be made with discount car insurance are considerable, many insurers offer protected no-claims bonus schemes so you can effectively 'insure' your discount. This means that you can make one claim (or possibly more depending on the insurer) within a given period, for example two years, without losing the discount you have already built up. Opting to protect your no-claims bonus will usually be marginally more expensive than choosing not to protect it but that could be a premium worth paying if you do have to make a claim.
How can you build up a no-claims discount?

In addition to offering a financial incentive, a no-claims discount is an incentive to drive safely. By concentrating on your motoring and not driving recklessly you increase your chances of avoiding a car insurance claim and therefore building a discount.

As an incentive to new drivers, many car insurers also offer rapid bonus schemes. This allows young drivers to earn a full year's no-claims discount in a shorter period - such as nine or 10 months. Rapid no-claims bonus schemes are designed to help young drivers bring their premiums down.

Auto Insurance Discounts

Auto Insurance Discounts
Are you eligible for an insurance discount?

State Farm auto insurance policies offer a variety of discounts that include:

* Multiple Vehicle
* Multiple Line
* New Vehicle Safety
* Accident Free
* Anti-Theft Device
* Defensive Driving
* Good Driving
* Good Student
* Driver Training
* Steer Clear® Safe Driver Discount