INSURANCE DISCOUNT WARNING: Are you unknowingly breaking your no claims discount?

Motorists are being cautioned that they may inadvertently void their no claims discount, potentially leading to higher insurance premiums.

According to car insurance comparison specialists at Quotezone.co.uk, many drivers might be unaware that certain actions can invalidate their no claims discount, or they might not fully understand what affects their policy.

One common mistake is taking a break from driving or being demoted to a secondary driver on a policy. Such changes can disrupt the continuity of a no claims discount, leaving motorists mistakenly claiming more years of no claims than they actually possess.

Given the ongoing financial pressures faced by households, maintaining a no claims discount is crucial for keeping insurance costs manageable. This discount signals to insurers that the driver is low-risk, helping to lower premiums. However, with many motorists switching insurance providers annually to save money, keeping an accurate record of driving history can be challenging. Any discrepancies in the information provided to a new insurer could render the entire policy invalid.

Experts recommend verifying your claims status before purchasing a new policy to ensure all details are accurate, thus avoiding potential issues. Drivers can also access their historical driving data through the Motor Insurers' Bureau (MIB) database.

It is also important to note that some UK insurers cap the no claims discount benefit at nine years. Motorists should consider this when switching providers and carefully review the specific terms of each insurer.

Staying informed and vigilant about your no claims discount could save you from unexpected costs and ensure that your insurance policy remains valid.

Quotezone.co.uk CEO and car insurance expert Greg Wilson said: “With the soaring cost of car insurance, it’s no surprise drivers are keen to protect their no claims discount.

“However, many may be unaware of the simple things that can invalidate their protection.  Without realising, certain changes to the policy, such as becoming a named driver instead of the main driver or having a gap of more than two years, say across the pandemic when they weren’t driving – could wipe clean the no claims build-up and void the insurance policy. 

“A no claims discount can be one of the biggest factors when it comes to the cost of a policy. Unfortunately, a lot of people perhaps don’t know these big ‘no no’s’ that can break their no claims and eradicate the discount they’ve built up.  

“The difference between 0 and 5 years no claims bonus can be significant too, estimating 30% for one claim-free year and 60% for five claim-free years – although again, each insurance provider may be different so drivers need to compare.

“No claims discount protection is another hot topic for discussion this year, customers need to check the details through with their insurer, get a quote with and without the additional protection for comparison and make sure their bonus is protected continuously should they decide to switch providers. 

“Normally protected discounts allow drivers to make up to two claims within a three to five year period without losing their no claims discount, but this can vary between insurers so be careful. 

“A recent Quotezone survey found 39% don’t read their insurance terms and conditions in full, this has never been more important, with a surge in new products flooding the market to help make insurance more affordable, it’s essential drivers check the details thoroughly and make sure they have adequate protection. 

“It will not only help them stay on the right side of the law but also help them find real savings by shedding any extras they don’t need.”