Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

Full Bio →

Written by

UPDATED: Oct 19, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance-related. We update our site regularly, and all content is reviewed by car insurance experts.

Important facts to know...

  • A no claims bonus is a discount presented to those drivers who have not filed any claims with an insurance provider
  • No claims bonus offers can be used to boost insurance coverage at a reduced cost
  • Comparison shopping for the best policy with the most generous bonuses is advised

Insurance policy holders do like to stick with those providers that have served them well. Similarly, insurance companies do wish to hold onto customers that have consistently paid on time and have not filed excessive claims.

Policyholders who never filed any claims are absolutely preferred by insurance companies since these customers reflect almost pure profit.

One way to hold onto auto insurance customers is to provide the popular “no claims bonus” discount. This type of bonus rewards good drivers and helps the insurance company retain those same drivers year after year.

Compare car insurance quotes by entering your zip code into our free rate tool above.

Basic Points About Auto Insurance Claims

When an insured driver is involved in an accident or other mishaps, they file a claim with the insurance company to cover the losses. If that claim is paid, it will go on your record. If your claim is withdrawn, it should not impact your ability to receive this kind of discount.

For example, a driver who hits a mailbox on someone’s property would seek financial protection from the loss by invoking auto liability property damage protection.

The homeowner would acquire the funds to replace the mailbox through the auto insurer as opposed to filing a suit in the local small claims court.

Auto insurance companies are designed to pay out on any claims associated with the particular coverage delineations. Liability is one, uninsured motorist would be another, and so on.

Each time a claim is filed, the insurance company has to spend money. In some instances, the payout would be far more than what the driver paid in premiums. Insurance companies log these claims and, as a result, the driver’s premiums go up.

Dropping the driver from coverage is another possibility depending upon how much money the driver is costing the insurance company.

In order to mitigate losses from payouts, insurance companies need to keep money coming in. Good drivers who pay their premiums and never get into accidents are highly valuable to insurance companies.

The no claim bonus rewards these drivers and provides incentives for the insured to stay on board.

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

The No Claims Bonus Detailed

A no claims bonus reduces the annual premiums on drivers who have not filed a claim in a set period of time. Not filing a claim for the first or second year of coverage probably won’t yield a discount.

Five years or more may very well lead to the discount kicking in. This information alone should be enough incentive for drivers to keep their safe and defensive driving habits sharp.

Not every auto insurance company offers the same terms and deals on a no claims — or any other — bonus. Comparison shopping is absolutely recommended in order to find the best deal on insurance that comes with a no claims bonus offer.

Please be mindful that the bonus may not automatically go into effect. The driver might be required to call the insurance provider and request the bonus be applied.

Drivers should always read any literature or other information supplied by the insurance company to increase the chances they are able to get the discounts owed to them. Reviewing the company’s website for information might be a smart time investment.

Maintaining the Bonus

Just as the bonus is easily awarded, the bonus may be easily taken away. A driver who files a claim with an insurance company must accept the fact that once a claim has been filed, the bonus ends up revoked.

Drivers who are irked over the removal of a bonus may wish to do a little extra comparison shopping to find an insurance company that provides a little more leeway. More than likely, all insurance companies “zero out” a no claims bonus once a claim has been filed.

Perhaps the no claims bonus loss could be supplanted by a new bonus. Signing up for a defensive driving class may reduce premiums. With the new claims bonus gone, a different bonus can help keep premiums down.

Increasing Coverage

Access to bonus offers and special savings can be about more than a way to cut down on the cost of a basic liability policy. The bonus could be used as a means of adding more coverage to the policy without spending too much money.

In addition to the aforementioned uninsured motorist coverage option the following coverages can be added:

Doing so might prove to be the best way of saving money. If anything happens to the vehicle, the insurance coverage may help eliminate thousands of dollars in losses.

Any driver who wishes to cut costs or maximize coverage needs to find the best available policy. Effective comparison shopping reveals what particular providers present fair rates, extensive coverage, and generous bonuses.

Those who have not performed any comparison shopping in a while should do so. Enter your zip code below to compare quotes today!