A sensible approach to no claims discount

15 September 2020

No-claims bonuses can make the difference between a premium that costs hundreds of euros, and one that costs thousands. Some insurers make it difficult for clients to qualify, but at DUAL, we aim for a more sensible approach.

For many motorists in Ireland, car insurance isn’t cheap. Clients expect their Brokers to shop around to find them the best value cover and save them the most money. However, just looking for a low premium isn’t necessarily the best way to keep costs down. An insurer’s attitude to no-claims bonuses can also cost or save your client significant sums.

Clean history, but no bonus

As in most countries, car insurance in Ireland is more expensive for younger or less experienced drivers. These motorists are statistically more likely to be involved in accidents, so it makes sense that their premiums would be higher. Less logically, the problem is also often worse for people buying an additional car, or clients who have been driving on a company fleet policy. That’s because most insurers require motorists to earn a separate no-claims bonus for each car they are insured on, rather than one for themselves as a driver. If they replace their car, they can transfer their bonus, but if they buy a new car in addition to their existing one, they have to start earning a new no-claims bonus from scratch.

Returning expats

It can also be difficult for expats to find affordable insurance when they return to Ireland. If a driver hasn’t been insured in Ireland for two or more years, their no-claims history may be lost. Even if they have been driving claims-free all the time they were out of the country, many insurers may still refuse them a discount. Some insurers in the market do offer bonuses to returning expats with a clean claims history. However, their eligibility depends on where they were living, and if the insurer accepts a no-claims certificate from that country. So, while a safe driver returning from New York might obtain a full no-claims discount, an equally safe driver returning from Shanghai may not.

Same driver, different premium

These limitations mean that a client with a clean, continuous driving history may need to start from the ground up, paying a full premium and re-earning their no-claims bonus yearon-year. They also mean that drivers who want to insure themselves to drive an additional car must choose which to apply their bonus to, and then start earning a new bonus on their other vehicles. This is the case whether they are driving a company vehicle, a world-class collection of vintage sports cars, or their spouse’s car. It makes no difference how safe the driver is, nor the fact that their skill and experience remain unchanged. If they drive multiple cars but have only earned one bonus, they may have to pay a full premium on any other car they drive. This can have a significant impact on the cost of your clients’ motor insurance. A clean claims history can save a driver more than half the cost of their premium. But if they have just returned from working abroad, or if they have just added a new vehicle to their car collection, most insurers could charge them as much as if they were a newly qualified younger driver.

The sensible solution

At DUAL, we think this doesn’t make sense. If your client has been driving a company car for years with no claims, and then decides to invest in a nice classic car for the weekends, they don’t suddenly become a more reckless driver. In the main, the difference between driving safely and dangerously is the driver themself, not the car they are in. That’s why we consider your clients’ driving history when we set their premium, and we offer the same bonus across all their vehicles. If your client has a clean driving history, we look to offer them a full no-claims discount that can save your client up to 60% of their premium, on every car they are insured on. If you are looking for sensible comprehensive car insurance from expert insurers, get in touch.

Kate O’Connor is the Head of Business Development at DUAL, the world’s largest international MGA. DUAL Private Client specialises, amongst other areas, in high net worth personal insurance in Ireland and are backed by AXA XL, a division of AXA, one of the world’s largest insurance groups. t: 01 6640001 / e:enquiry@dualgroup.ie

This article was first published in the September edition of Irish Broker Magazine - read the PDF version.