Thread: Home Insurance & No Claims Discounts

Home Insurance & No Claims Discounts

A no claims discount is a price reduction offered by your home insurance company in return for not making a claim on your policy throughout the year. Building up a no claims bonus is a great way to secure discount home insurance rates and drive down the cost of cover.

How Does A No Claims Discount Work?

The amount of no claims discount you're offered on your home insurance quote is calculated on the number of years you have gone without making a claim. Insurance companies base their premiums on statistics and past form, so if you have a history of not claiming on your insurance then companies will be happy to offer you a discounted rate to attract or retain your custom. Discounts vary between companies but most people see their home insurance premiums drop by up to 30% after building up a single year of no claims bonus - savings can reach around 70% if you go 5 or more consecutive years without a claim.


Should You Protect Your No Claims Discount?

Once you have built up 4 years no claims many insurance companies will offer you the opportunity to protect your no claims discount for a small increase in the cost of your premium; this will allow you to make a small number of claims against your insurance without losing the discount you have built up.

The last thing you want is to spend years building up a healthy discount with your provider, only for a single accident to undo all the years of good behaviour - It may seem unfair, but if the insurer thinks you're likely to make another claim, it will bump it's prices back up. Our comparison tool allows you to compare home insurance with protected no claims so you can see how much it will cost to secure your discount.

How To Avoid Claiming On Your Home Insurance

In order to continue reaping the benefits of discounted home insurance prices it pays to minimise the likelihood of making a claim.

• Be careful around the house - if nothing gets damaged, then there is nothing to make a claim on.
• Stay secure - minimise the risk of theft by installing a burglar alarm system and ensuring all doors and windows are locked
• Maintenance - keep an eye on the condition of your property, small repair jobs could well save the cost of claiming to fix a larger and more expensive problem further down the line.

Also, consider whether making a claim to replace or repair an item would work out to be more expensive than simply paying for a new one instead.

Source: moneysupermarket.com

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