One of the easiest ways of saving money on your motor trade insurance is to keep accruing your no-claims bonus (NCB) or no claims discount (NCD). This is a reward for not making a claim and the greater the number of claim-free years, the lower your premium.
If you have an accident and make a claim on your motor trade insurance, you will potentially lose some years of your NCB, and your premium costs will likely go up as you will be considered a higher risk in future.
From no claims bonus discounts, the transference of no claims and keeping your no-claims costs down here is our guide to help you choose the best full-time and part-time motor trade insurance policy.
How to Build Up Your No-Claims Bonus
When starting out as a motor trader, there are generally three ways in which you can either begin or grow your NCB.
Firstly, if you are new to driving in general, or don’t have any NCBs, you will need to start at zero no-claims on your motor trade policy and annually increase. With a Tradex motor trade insurance policy, there is also the Bonus Booster, which offers those with no bonus a six-month policy to accrue a year’s no claims bonus and subsequently use this on a full-term policy.
The other two options are to transfer an existing NCB from your private or commercial vehicle to your motor trade policy or mirror the NCB you have already built upon these vehicles. Note that mirroring isn’t always possible with all insurers. Keep reading for more information.
From here, if no faults are made on your policy within a 12-month policy period, you will have earned an additional year of NCB.
Keeping Your No Claims With a Traders Policy
Generally, transferring your NCB between insurers is fairly straight forward but do check the small print. Whether it is part-time motor trade insurance or a full-time policy, you should save money on your premium as the number of years claim-free accrue.
You should expect your motor trade insurance broker to be able to negotiate generous discounts for a no claims bonus built up over a number of years. The greater the level of NCB, the greater the discount. Unlike private car insurance, five or more years is normally considered the maximum NCB in the motor trade (‘max NCB’). Make sure you keep copies of your no claims from your existing insurance company so the new company can see your driving history.
Protected No Claims Bonus
Protecting your NCB allows you to protect the number of years NCB that you have earned in the event of an accident. This will cost slightly more but will let you make a claim without losing your no claims bonus and inflating your premiums the next year.
The rules of how many years are protected after an accident vary between insurers. Most will protect the full fives years after one accident, but this can drop by a couple of years after two accidents in a 12-month period – known as the step back scale.
If transferring your policy to a new insurer, check with them first that they will honour your protected bonus status. Sometimes, if a claim has been made, a new insurer could choose to reduce your bonus entitlement even though it had previously-protected status.
Insuring Employees
If you need to register drivers on your insurance policy, try to choose those that aren’t going to have an impact on your NCB. Select drivers over the age of 25, who are safe and reliable and possibly have advanced driving skills. Avoid those with claims and driving offences to keep your premiums reduced.
'Mirror' Your NCB on Another Car or Van
Sometimes known as a ‘mirrored no claims discount’, it means that an NCB you have built up privately on a road risks policy could be used to give you an introductory discount on your motor trade policy. However, to keep your private policy NCB, you’ll also need to continue that policy as well as the new one so it may prove expensive.
To get yourself up and trading, you could also transfer your NCB from a private car or commercial vehicle policy to your motor trade policy if you have a good level of no claims built up. There is a disadvantage to this, however, as normally you are not able to transfer a motor trade NCB back to a private policy should you need to.
What If I May Need to Claim?
Of course, there is likely to be a time when you need to make a claim, especially if you have a fleet of vehicles. Before you do that though, it’s worth assessing whether it’s more financially worthwhile to fix the damage yourself. If you make a claim, you will be losing both your NCB and still have to pay the policy’s excess.
If the damage to your vehicle would cost £1,000 to repair but you have an excess of £500, you would still need to pay the excess amount in addition to losing your no claims discount. As you are in the industry already, it may be that you could get it fixed more cheaply, protect your claims and prevent future premium price hikes. Still report the accident to your insurance company but let them know you do not wish to claim.