How much does a no-claims bonus save you on car insurance?

No-claims bonus savings on car insurance

New research has from a market-leading comparison site has revealed how much money a no-claims bonus can save you on car insurance

MoneySuperMarket’s analysis of 17.8 million car insurance enquiries found that five years’ no claims bonus (also known as no-claims discount) can save you a healthy 24 percent on your premium.

If you were, for example, quoted £800 for a year without any no-claims, five years of no claims could get you down to around £600.

More surprising are the savings for those with less no-claims bonus. Four years’ no-claims still gets you a 23 percent discount, while three years saves you 22 percent.

Two years’ no-claims saves you 19 percent on your car insurance, while a one-year no claims bonus results in a 12 percent discount (that’s still almost £100 off an £800 quote).

No-claims bonus savings on car insurance

“No claims discounts are a great way to save money on your car insurance,” said Rachel Wait, consumer affairs spokesperson at MoneySuperMarket. 

“Insurers are keen to reward those who prove they’re safer drivers, and multiple years without claiming for damage is the best way to demonstrate this. 

“It’s worth noting that when switching your car insurance policy, many insurers also honour no claims discounts accrued during your time with your previous insurer, so finding a better deal won’t necessarily mean starting from scratch.”

She did sound a word of caution, though. “The number of years honoured varies, so it’s important to find out how it might affect you before you switch.”

Car insurance company tells drivers to slow down

An insurance company has been telling drivers to slow down

If you received a communication from your car insurance company telling you to slow down, would you take any notice?

Insurethebox says it has been in touch with 80,000 motorists over the past two years in an attempt to prevent bad behaviour. It says it can identify which customers are the most likely to have an accident.

It’s a little like receiving a tap on the shoulder from your headmaster. Or being told off by your dad.

But here’s the thing. Insurethebox reckons it has prevented around 700 road traffic accidents and 22 serious injuries over the past three years. That’s quite a claim.

This follows the news that researchers at a Canadian university concluded that speeding is a strong predictor of crashes.

“We know that speed is the single biggest influence on accident risk, but despite this, drivers are continuing to speed”, said Simon Rewell, road safety manager at Insurethebox.

“The latest government speed compliance statistics show that, in 2018, under free-flowing traffic conditions, 46 percent of cars exceeded the speed limit on motorways, 52 percent on 30mph roads and 10 percent on 60mph roads.

“We believe young, inexperienced drivers are particularly vulnerable to the risks.”

Insurance company contacts drivers

The company used five billion miles of driving data and associated claims to identify how, where and when speed has a critical influence on the frequency and severity of accidents.

Customers were targeted via tailored communications, highlighting the risks they pose to themselves and other road users.

It’s good to talk

“Encouragingly, 70 percent of customers say our programme has made them drive more safely,” continued Simon Rewell.

“Our initiative demonstrates in the most tangible way possible the huge beneficial social impact proactive risk management has, not just for inexperienced drivers but the population at large, averting or reducing the impact of life changing events.

“We also believe the results demonstrate that if all insurers communicated with policy holders in a similar way to us, 1,000 serious injuries could be avoided and 80 lives saved each year in the UK alone.”

Would a letter or email from your car insurance company encourage you to change your driving behaviour? Let us know in the comments below.

New ‘matchmaker’ app promises cheaper insurance for young drivers

Honcho car insurance app launches in UK

A new app is targeting young drivers with a promise of cheaper car insurance.

Honcho is a reverse-auction marketplace which acts like a ‘matchmaker’ between customers and insurance companies or brokers. It’s available for motorists of all ages, but the company says young drivers will see the greatest benefits.

Unlike price comparison websites, Honcho charges insurance companies and brokers a £1 fee to compete for consumers’ custom. The insurers get three rounds of bidding to offer the best price, with the companies able to view rival bids. Young drivers should see a reduction in the £1,177 a young driver typically pays for insurance.

The company says insurers are charged up to £60 per policy on a price comparison website and this fee is passed on to the consumer. The £1 fee should mean that the insurance companies can reduce their own prices, it says.

It can’t guarantee the lowest price for a particular policy, so consumers may be able to find it cheaper elsewhere.

‘Revolutionary for drivers of all ages’

Young person using Honcho app

Gavin Sewell, CEO of Honcho, said: “Honcho is one-of-a-kind and will be revolutionary for drivers of all ages.  However, we’re especially keen to see the benefits to young motorists who, for so long, have struggled to acquire fairly priced policies – with many paying 149 percent more than the average driver.

“We see Honcho taking on the role of ‘matchmaker’ between customers and insurers or brokers, initially for car insurance, but with a view to offer the service across a range of other insurance products and markets later this year.

“We’re also very much championing consumers’ interests with absolute clarity and transparency in all that we do. It’s going to be the way forward and price comparison websites are going to feel us hot on their heels.”

Car insurance policy

To use Honcho, consumers download the app from the Apple App Store or Google Play Store and then scan their driving licence. Insurers bid against each other to offer the price, with consumers able to use a so-called ‘Honchometer’ to see how closely each bid matches their requirements.

In common with a price comparison website, the consumer is free to choose the insurance provider of their choice.

Companies signed up to the platform include Brightside, Flux Direct, Quoteline Direct, Freedom Brokers, Marmalade and Think Insurance. Underwriters include Aviva, Axa, LV, Ageas and Zurich.

Andy Martin, broker and distribution director at Marmalade, said: “This new app has the potential to really shake up the way insurance is delivered and we’re especially excited to be reaching out to more young drivers to help them drive down the cost of insurance with the help of our black box technology.”

Click here to find out how to get cheaper car insurance.

Speeding drivers ‘most likely to crash’

Speeding drivers 'riskiest'Speeding is the riskiest form of aggressive driving, according to a university in Ontario, Canada.

Researchers at the University of Waterloo studied data from 28 million trips to identify possible links between bad driving and the likelihood of a crash.

The analysis revealed that speeding is a strong predictor of crashes, but links for the other kinds of aggressive driving – hard braking, hard acceleration and hard cornering – couldn’t be established.

Researchers used data from insurance companies in Ontario and Texas to identify 28 crashes based on indicators such as rapid deceleration. Each vehicle was then matched with 20 control vehicles that not been involved in a crash but had similar characteristics, such as location and driving distance.

When the crashes were compared to the control cases, speeding emerged as the key difference between them.

Used effectively, this data could be used to transform the way insurance companies calculate annual premiums. At present, the price is based on a number of factors, including age, location, use and engine size. 

Analysis of telematics data could deliver highly personalised premiums based on actual driving behaviour. If a driver spends a high proportion of their time breaking the speed limit, the following year’s premium could rise.

Slower driving could be rewarded with a reduced premium.

‘Always-on’, always watching

Of course, having an ‘always-on’ telematics device in the car raises privacy concerns. Not only will your insurance company know when a policyholder has driven too fast, they will also know where they have been, the route they take to work and even their choice of radio station.

Telematics are nothing new: the fleet industry uses devices to track drivers and vehicles, while young motorists save an average £151.25 with ‘black box car insurance’.

Research by RAC Business found that 40 percent of businesses faced staff concerns about privacy, which is why it launched a personal key fob to allow workers to turn off telematics when they’re not driving for work.

Speed causes crashes

‘We are super pumped’

From a wider perspective, Allaa Hilal, an adjunct professor of electrical and computer engineering, believes the data could be used to make roads safer by giving drivers tangible evidence that speed is a primary contributor to crashes. 

“Some of the results are no surprise, but prior to this we had a whole industry based on intuition,” said Hilal. “Now it is formulated – we know aggressive driving has an impact.”

“Having this information exposed and understood allows people to wrap their minds around their true risks and improve their driving behaviours. We are super pumped about its potential.”

Stefan Steiner, a statistics professor at Waterloo University, said that the study was “limited by several unknowns” and more research is required to verify the results.

How to ensure a successful car insurance claim

How to ensure a successful car insurance claim

Around 43,000 car insurance claims are turned down every year, leaving motorists out of luck and out of pocket. 

Conversely, insurers pay out just under £22 million for private car insurance claims every day, which equates to just under £3,000 per claim. 

If you want to avoid being one of the two percent of motorists who have their car insurance claim rejected, take a look at these five ways to ensure a claim doesn’t get turned down.

Buy the right policy

Not having the right cover in place is one of the most common reasons why car insurance claims are turned down. Don’t just buy on price – make sure you consider all your needs. For example, if you drive to work, make sure the policy includes commuting.

The claim value being below the policy excess is another reason why claims are rejected. Be sure to check your voluntary and complusory excesses before arranging cover.

Read the small print

car insurance claim form

It’s always tempting not to read the small print, but you could be missing out on what isn’t covered by the policy. The policy document will outline any procedures you need to follow, such as notifying the insurer if you change your job or move house.

Modifying your vehicle could invalidate the policy, so notify your insurer if you fit a towbar. Similarly, if you exceed your agreed annual mileage, you’re at risk of having your car insurance claim rejected.

Secure and maintain your car

Insurers expect drivers to take steps to prevent accidents, theft, loss or damage. A theft claim will be rejected if the key has been left in the ignition or the driver is found to have been under the influence of drink or drugs.

A car insurance policy is invalid without a current MOT certificate unless the vehicle has been declared SORN and the policyholder has arranged laid-up cover.

Act quickly and follow the procedures

Car insurance Brexit

In the event of a claim, follow the procedure outlined in the policy document and report losses promptly. The insurance company will guide you through the claims process and deal with a third party on your behalf.

Be sure to write down anything relating to an accident; dashcam footage and photographic evidence can be extremely useful in the event of a claim.

Be honest if you want a successful car insurance claim

Don’t bend the truth when arranging cover or making a claim. Providing incorrect information or omitting details could invalidate your insurance, as could exaggerating the value of a claim.

If an insurance company finds that you have been dishonest, they are entitled to decline the entire claim.

‘Insurance is complex’

Matt Oliver from GoCompare, the company behind the car insurance advice, said: “Insurance is complex, but when applying for cover, it’s essential to be honest, and take the time to read through the policy details to make sure it covers everything you need and has excess levels you can afford.

“The information you give when applying for insurance is used to determine the cost of cover, so omitting information or bending the truth to get a cheaper deal could land you in trouble if you need to make a claim.”  

How to save money on your car insurance

How to save money on your car insurance

Car insurance is one of the biggest expenses associated with running a car, so it’s natural that you’d want to know how to save money on your annual premium.

No specific advice can guarantee a low premium for all, but here’s our general guide on how to – legally – save money on your quote. And the things you definitely shouldn’t do…

Buy the right car

This seems obvious and, of course, there’s probably a whole other article here. Generally speaking, the bigger and more powerful the engine, the more expensive the insurance. Likewise, a more prestigious and expensive car will bump up the cost, as will any model considered an accident-magnet. Ask any new driver who tried to insure a Citroen Saxo after 2005.

If saving money on car insurance is your prerogative, food-blender-powered hatchbacks will be cheaper than gas-guzzling coupes. But for many reading here, that won’t matter. You have your car and simply want the cheapest quote. There is hope for you, though. Read on…

Shop around to save money

Too many are complacent about car insurance. We don’t put in the legwork, shop around, bounce between providers. That’s exactly what we should be doing to save money.

Get on the price comparison sites but also contact companies directly. It’s mostly up to chance which provider will give you the best deal, so it’s worth talking to all of them.

Get your story straight

cheap car insurance

There are a number of things you must tell an insurer about yourself and your driving career. These include: how old you are, how long you’ve been driving, if you’ve had any accidents and when, what you do for work, where you live, how much you drive, where the car is parked… All this and more comes in to play.

While you must tell the truth, there is leeway to be explored. Your career for instance, can be listed in a number of different ways. A photographer is a videographer is a multimedia assistant. A bricklayer is a builder is a labourer  and so on. Play with the variables, but don’t stray from the truth.

It’s worthwhile working out how far you drive, too. The number of miles you cover in a year can affect your quote. Lower is better, in most cases.

Different types of policy

There are generally two types of policy: third-party, fire and theft, and fully comprehensive. If your car is worth anything over £500, we’d recommend fully comprehensive.

Third-party policies do not cover the cost of repairing or replacing your vehicle in the event of an accident – only the car or object you crash into. Third-party is often a last resort taken by new drivers to get their premiums down.

Multi-car policies are interesting, however. Whether you’re living with your parents or have flown the nest, they can offer significant savings, saving you money on your car insurance.

Young drivers can also get on their parents’ policy – fully-comp, with the ability to earn a no-claims bonus – for potentially a lot less than insuring themselves. Likewise, if you live with a partner and you both drive, it’s definitely worth checking whether you can share a multi-car policy.

Get a black box to save money

It’s not the most elegant or convenient of solutions, but having a black box watching your every move behind the wheel often prompts insurers to charge you less. It’s become a mainstay of the newly-passed young driver.

Move somewhere cheaper

car insurance

Location is a big factor in the cost of car insurance. Maybe you should consider moving away from Carjack Alley and closer to Upstanding Avenue.

Don’t crash

Obviously, not crashing is a good thing in general. Never mind the immediate stresses of a prang, for the next three years (at least), your insurance will be more expensive.

All thanks to the no-claims bonus that you shattered – along with someone else’s headlight…

Get older

With age and experience come a great many things, including cheaper car insurance. Both 21 and 25 are big milestones when it comes to lower quotes.

If all else fails and you can afford to go without a car, sit on your licence until you’re a bit older. Pass your test as early as possible, though. Remember, they ask how long you’ve had your licence when totting up quotes.

How not to save money on your car insurance…

Car insurance

Don’t lie on your policy, about anything – simple as that. Don’t lie about modifications, the miles you’re doing, where you live, what you do, where the car is parked and so on.

Any untruths will invalidate your policy in the event of an accident. It’s not worth the risk.

What is a car insurance excess?

What is a car insurance excess

Voluntary and compulsory excesses are two of the most misunderstood elements of car insurance, according to research by GoCompare.

Excess-related elements, including ‘compulsory excess’ and ‘voluntary excess’ finished towards the bottom of a list of 16 common car insurance terms.

Worryingly just 30 percent of drivers would be able to afford to pay the excess in the event of an insurance claim, with only 35 percent of drivers surveyed saying they check the policy excess when arranging cover.

What is an excess?

Guide to car insurance excess

The excess is the amount of money you’ll have to pay if you make a claim on your car insurance. An excess will be applied to claims for theft, fire damage, at-fault accidents and write-offs.

There are two types of excess: voluntary and compulsory. Combined, these make up the ‘total excess’, which could add up to a significant sum. It’s one of the reasons why you should check the finer details of an insurance quote, and not just the annual premium.

For example, if the voluntary excess is £250 and the compulsory is excess is £300, you’ll have to pay £550 towards the cost of any claim – and this on top of the annual premium.

The voluntary excess is chosen by the policyholder and is the amount of money you’re prepared to pay in the event of a claim. Paying a higher voluntary excess could lower your premium but will cost you more if you make a claim.

The compulsory excess is set by the insurer and will vary depending on several factors, such as the policyholder’s age and experience and the type of car that’s insured.

Note: insurers will only process claims once the excess has been paid, regardless of who is at fault. 

If the other driver has admitted fault and notified their insurance, the excess might be waived. When the insurer is certain you’re not at fault, you’ll get the excess back.

Excess protection

Car insurance excess protection

GoCompare is giving away a free £250 excess cover to every customer who buys a qualifying car insurance policy.

Customers who need to make a claim will be reimbursed up to £250 excess when their insurance claim has been settled.

Lee Griffin, CEO and founder of GoCompare, said, “Policy excesses are a grey area for many people and, as a result, they can provide a nasty shock during a claim – a time when there is already enough stress.

“Our research has revealed that excesses could contribute to genuine financial hardship, with 37 percent of drivers admitting that they don’t have the means to pay their excess or would have to turn to credit cards or loans.   

“Whether you’re arranging insurance for the first time or renewing cover, it’s important to consider the total cost of the policy. This means looking at the amount you pay upfront by way of the policy premium, and the cost of the excess payable if you’re unfortunate enough to need to make a claim.”

For more information, visit GoCompare’s detailed guide to car insurance excess.

Do I need to declare an accident if I’m not at fault?

Do I need to declare an accident

Car insurance can be a baffling business, especially when it comes to making a claim.

Whether you’re at fault, or it was someone else, or an act of God, the grey areas around declaration and accountability always loom. Here’s our guide to the dos and don’ts, for if the worst should happen.

Do I need to declare all accidents to my insurance company?

Your insurance company wants you to declare all incidents that happen in your car. Accidents that aren’t your fault are no exception. In short, there is grey area around what you need to declare. If you have an accident, whoever’s fault it is, your insurer needs to know.

Any incidents you do not declare to your insurance company, which they then find out about later, could invalidate your cover. It could also make it very difficult to get quotes in future.

Will declaring a non-fault accident affect my insurance?

Do I need to declare an accident

Just as all accidents must be declared, so too will all declarations affect your insurance. It’s an unfortunate fact of life.

Any accident insurers learn about affects their judgement of your risk level as a driver. The good news is that your no-claims bonus should not be affected, but prepare for steeper renewal costs nonetheless.

How can I cut the cost of my car insurance?


There are a few good ways to reduce your insurance premium. First and foremost, shop around. Insurers are ultimately in competition for your business. Your insurer will usually renew your cover at a price you could easily beat if you looked elsewhere.

Adding named drivers, a telematics ‘black box’ and increasing your voluntary excess are other options worth considering.

What you mustn’t do is lie about anything on your policy, including your annual mileage, any modifications to the car and where you live. There is a zero-tolerance policy to bending the truth when it comes to insurance.

Car insurance cheaper with 9 points than zero no-claims bonus

Car insurance premiums

New research suggests having nine points on your licence can result in cheaper car insurance premiums than starting from scratch with your no-claims bonus.

Quote results comparing the variables demonstrated that on average, having nine points instead of zero no-claims bonus resulted in quotes that were 10 percent cheaper.

Both men and women also got cheaper quotes with six points than they did with three years no-claims bonus or fewer.

“The research is eye-opening, dispelling common myths including that penalty points could spell disaster when it comes to insurance costs,” said Rob Walker, managing director of Vantage Leasing.

Car insurance premiums

There is a proviso, though. Younger drivers will find their quotes are more adversely affected by having points than older drivers. That being said, it’s rare that someone under the age of 21 will have more than three years no-claims bonus. Either way, car insurance isn’t a young person’s game…

Garage parking costs more than the road

Another interesting out-take was that parking your car on the road is often cheaper than parking in a locked garage.

The research showed road parking was cheapest on average, with quotes coming out 10 percent cheaper than for a garage. As ever with car insurance, though, it’s down to the individual scenario. There’s nothing for it but to bite the bullet and compare prices for yourself.

Car insurance premiums

“While the research shows what a typical male or female driver can expect, it doesn’t cover every eventuality, and some may find their circumstances produce different results,” explained Walker.

“It does, however, provide some intriguing insights into the ever-evolving nature of vehicle insurance.”

Young drivers save £50 million with insurance black boxes

young drivers insurance savings

Direct Line says it has saved young drivers more than £50 million by introducing black box trackers for car insurance.

The systems monitor the ‘quality’ of a person’s driving, based on their speed and smoothness, along with where and when each journey takes place.

If the score generated isn’t up to spec or could be improved, an overview is available, as well as over-the-phone tuition. This can help drivers up their score in specific areas.

Research by The Floow indicates that for every 100 low-scoring graduates, this coaching increases boosts their scores by around 30 percent. Overall, the system allows insurers to have a better understanding of the risk drivers pose and set premiums accordingly. 

young drivers insurance savings

Let’s break that £50 million down into something tangible, shall we? Direct Line says that saving was made over the course of five years and two billion driving miles. Doing the maths, that’s an average saving of 2.5p per mile travelled.

Tot that up to an average year’s mileage and you get an annual saving of £250 per person.

“Working with The Floow has proved to be fantastic and we are delighted to have reached such a monumental milestone of scoring two billion miles,” said Annette Fox, head of telematics at Direct Line Group.

“We know that through data we will have a much better understanding of risk which will not only enable us to offer better premiums to young drivers, but we can help educate, inform and improve road safety overall.”