The laws regarding Car Insurance
in the United Kingdom.

SUMMARY: The no claims bonus started out as a reward for careful drivers. But now, we seem to be paying out extra cash to hold on to our privilege.

By Melinda Varley

  (secured loans)

But fear of losing this discount is putting off many drivers when it comes to make a claim. Research from insurer More Than, has found that 43 per cent of motorists would pay £200 or more on car repairs, rather than claim on their insurance and lose their NCB. In London, nearly 30 per cent of drivers would pay fork out more than £500 still before making a claim.

Typically, depending on the insurer, you will lose one or two years of our discounts if you claim, and you may also run the risk of your premium increasing. Many drivers, therefore, dont think theres much point in making a call on their policy unless its for a substantial amount.

According to a spokesman from AXA Insurance they could be right, "If its only for £200, it wouldnt be worth it, particularly if the no-claims discount isnt protected," he said. (home insurance quotes)

Most insurers offer customers the option of protecting their NCD, although this will increase the premium and you usually need at least four years no-claims before youll be eligible. However, paying the extra could be worth it.

"If you make a claim, your NCD would step back two years, which would mean your discount is cut by about 20 per cent," says the market development manager for ( mortgage rates ) private motor insurance at Norwich Union. "If you live in a large city and are in the highest premium bracket, a 20 per cent increase can make a big difference to the cost."

But the terms of these guarantees vary, so the motor insurance ( car insurance policy ) manager at More Than, recommends that you check the wording of the policy. (remortgages)

However, with most insurers your NCD is protected only for a certain number of claims. Another result of making a claim is that your premium will go up, and most protected NCD policies dont offer cover for price hikes.

Its a crazy situation when people are paying for car insurance and then not claiming for fear of losing their bonus.

However, other insurers, such as Churchill, dont think this is a big issue ( online car insurance quotes ) for motorists says their Group Head of Motor Underwriting.

"The overriding factor for people is whether they want comprehensive cover or third party, fire and theft. The level of NCD, and whether its protected, and the excess are considerations, but I think these do play second fiddle to price," he said. (cheap mortgages)

The NCD is usually unaffected if the insurer can make a ( term assurance ) full recovery of its outlay such as from the liable partys insurer, or if the policyholder should recover all uninsured losses. Claims for windscreen damage do not normally affect NCD entitlement.

Click here for page 2