What Is a No-Claims Bonus and How Can You Maximise It?
When shopping around for car insurance, one term you’ll often hear is “No-Claims Bonus” (NCB). It’s one of the most valuable rewards insurers offer for safe and responsible driving. But what exactly does it mean, how does it work, and how can you make the most of it?
What Is a No-Claims Bonus?
A No-Claims Bonus is a discount you earn on your car insurance premiums for every year you go without making a claim. In simple terms: the longer you drive claim-free, the bigger your reward.
Think of it as your insurer’s way of recognising you as a low-risk driver. Depending on the company, your NCB can accumulate over multiple years—sometimes up to five or more—leading to significant savings.
How Does It Work?
- Year 1: After your first year without a claim, you earn your initial NCB.
- Year 2 onwards: Each claim-free year builds your bonus, reducing your premium further.
- Claims reset or reduce it: If you make a claim, your NCB may decrease or reset, depending on your policy terms.
For example, if your premium is R1,200 per month, and your NCB earns you a 20% discount, you’ll pay only R960. Over a year, that’s a saving of R2,880—just for driving carefully.
Benefits of a No-Claims Bonus
- Lower premiums: The most obvious benefit is reduced monthly costs.
- Reward for good driving: Encourages safe, responsible behaviour.
- Transferable: In many cases, you can transfer your NCB when switching to another insurer.
How to Maximise Your No-Claims Bonus
- Drive Safely
Avoid speeding, distracted driving, and risky manoeuvres. Fewer accidents mean fewer claims. - Consider Paying Small Claims Yourself
If the damage is minor (like a broken side mirror or scratches), paying out of pocket might be cheaper in the long run than losing your NCB. - Choose Higher Excess
Opting for a higher excess (the portion you pay before insurance kicks in) can discourage small claims and help keep your NCB intact. - Protect Your Bonus
Some insurers offer “bonus protection” at an extra cost. This allows you to keep your NCB even if you make one claim during the year. - Maintain Your Policy
Don’t let your insurance lapse. Continuous cover ensures your NCB builds year after year.
Why It Matters in South Africa
In today’s economy, saving on monthly expenses is crucial. With rising fuel, repair, and living costs, maximising your NCB can make a noticeable difference. Many South Africans now look at their NCB as a key factor when comparing insurers.
Choosing the Right Cover
When comparing policies, don’t just look at the premiums. Consider how insurers handle No-Claims Bonuses—some are more generous and flexible than others.
If you’re shopping around for the best car insurance, look for companies like Pineapple Insurance, who reward safe driving while still offering affordable, transparent cover.
Final Thoughts
A No-Claims Bonus is more than just a discount—it’s a financial reward for being a careful driver. By avoiding unnecessary claims, maintaining continuous cover, and making smart decisions, you can build up a bonus that saves you thousands of rands over time.
Safe driving doesn’t just protect you on the road—it protects your wallet too.