What is a No-claims bonus (NCB)?
One of the easiest ways of saving money on your motor trade insurance policy is to build up your no-claims bonus.
The terms ‘no-claims bonus’ and ‘no claims discount’ mean the same thing.
Put simply, no-claims bonus on road risks insurance is like private car or commercial vehicle insurance:
- You earn a discount on your motor trade insurance renewal for each year that you don’t make a claim
- The percentage of discount gradually increases each year, up to a maximum of 8 years with Bollington (depending on your insurer)
When you start out as a motor trader, you have three options:
- Start with zero no-claims bonus and build up NCB on your motor trade policy
- Transfer your private car or commercial vehicle NCB to your motor trade policy
- Mirror the NCB you have built up on your private car or commercial vehicle policy
There are pros and cons to each of these options, which we’ll explain shortly. Additionally, transferring or mirroring NCB is only possible with certain insurers.
How do you build up your no-claims bonus?
Obviously, the easiest way to build up NCB is not to claim on your insurance! For every year you don’t make a fault claim on your policy, the percentage discount on your insurance renewal will increase (up to a maximum of 8 years with Bollington).
Claims for windscreen damage generally don’t affect your NCB.
Transferring or mirroring private no-claims bonus on a motor trade road risks policy
To get yourself up and running, you could transfer your no-claims bonus from a private car or commercial vehicle policy to your motor trade policy. This could save you money, depending on the level of no-claims bonus you’ve built up.
The disadvantage of this is if you stop working in the motor trade then you normally cannot transfer your motor trade NCB back to a private policy. There are some policies we have access to that might help here, but you need to think carefully about how long you’ll be working in the motor trade before transferring your bonus.
Likewise, you could opt to mirror (or copy) the NCB you’ve built up privately on a road risks policy. However, in order to keep your private policy NCB, you’ll need to continue that policy – so weigh up whether it’s worth paying for both a motor trade and private car policy before doing this.
Protecting your motor trade NCB
It didn’t used to be possible to protect NCB on a motor trade policy – but now you can!
If you choose to take advantage of this option, bear in mind that only one claim is permitted in each 12-month period.