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Rising Premiums – No Claims Bonus and When Not to Claim

Rising insurance premiums in motor trade insurance can leave many people scratching their heads. They are often a cause for concern for motor traders who don’t fully understand why they rise and how they can prevent certain rises.

In order to save money on your motor trade insurance you must build up your No Claims Bonus. Good brokers will find and negotiate good discounts, providing you have a No Claims Bonus which has been sustained over several years. Bollington Motortrade can even offer further discounts to those with over five years’ no claims bonus to their name.

Rewards for not making claims

No Claims Bonus means just that – you receive a bonus discount on your premium as a reward for not making claims on your insurance. Of course, at times you may have to claim. After all, that is what motor trade insurance cover is there for. It is a highly valuable safety net which protects your trade business. What you need to ensure is that you don’t claim for everything. Weigh up your options carefully. You could be better off covering the costs yourself when something goes wrong. It might mean taking a bit of a financial hit, but it will be worth it to retain your no claims discount.

Always retain copies of your no claims confirmation. Insurers can then see that you’ve been claim free for however long it might be. Certain motor trade insurers show just 5+ years no claims bonus, which makes it harder to prove that you have maybe 8, 9 or 10 years no claims, and so on. But generally the more years claim free, the better. For example, more than five years can lead to as much as 20% additional discount as well as the discount earned for no claims in the first five years.

You may have set yourself up as a motor trader for the first time, meaning you won’t have had any motor trade insurance previously. However, you may not know that you can often use the no claims bonus earned from driving your private or commercial vehicle if you fit the insurers’ underwriting criteria.

Remember to consider your excess

However, it’s not just the no claims bonus that you need to think about but your excess as well.  If, for example, accident damage is going to cost an insurer £1,000 to repair, but your excess is £500, then you’ll still have to pay £500 to repair the damage. But it may only cost you £500 to get the vehicle repaired yourself or within the motor trade.  There’s not much to think about, really. Protect your no claims by paying to have the work done yourself; you don’t need to turn to the insurers.

Premiums are always changing

Of course, you may not have made any claims over the course of a year, yet your premiums might still rise, or not fall by as much as you might expect. You might query why this is. Unfortunately, insurers are constantly paying out large sums of money to cover other people’s claims, to cover the costs for the victims of accidents, and for fraudulent activity.  There has been a rise in fraud in recent years, leading to insurers losing money as a result. Fraud can be as small as neglecting to inform your provider of your full claims history, to driving without valid insurance, through to something as serious as setting up car crashes. The insurance industry is determined to combat fraud, but the cost of doing so may also have an impact on the general cost of your insurance.

It is worth remembering that you have a legal obligation to report accidents involving other people, other people’s vehicles and property – but that does not necessarily mean that you will personally need to claim on your motor trade insurance as a result.

However, the less claims you make personally, the less your general insurance cost is likely to  rise. So it is still essential that you watch when you claim and when you don’t.

Bollington Motortrade will seek out the best renewal quote for you, keeping any rise in premium to a minimum and reducing your costs wherever possible.