Questions Around No – Claims Discount Offered By Car Insurers In South Africa

No-claims discount (NCD) is a discount offered by car insurance companies in South Africa as an incentive for drivers who do not make claims on their car warranty policies. This discount is given to drivers who have not claimed from their insurance policy in a specified period, usually one year. The no-claims discount varies between motor warranty companies, but it can be up to 60% of the premium.

Here are some common questions about no-claims discount offered by car insurers in South Africa:

Q: How does no-claims discount work?

A: No-claims discount rewards drivers who do not make any claims on their car insurance policy. The discount is calculated as a percentage of the premium and is based on the number of consecutive years the driver has not made a claim. For example, if a driver has not made a claim for three consecutive years, the insurer may offer a no-claims discount of 30% on the premium. The discount usually increases with each year of no claims, up to a maximum of five years.

Q: What happens if I make a claim on my policy?

A: If you make a claim on your car insurance policy, your no-claims discount will be affected. The discount may be reduced or lost completely, depending on the terms and conditions of your policy. Some insurance companies may offer a protected no-claims discount, which means that you can make one or two claims without losing your discount. However, this protection usually comes at an additional cost.

Q: How can I protect my no-claims discount?

A: You can protect your no-claims discount by paying for a no-claims discount protection add-on to your car insurance policy. This add-on will usually allow you to make one or two claims without losing your discount. However, this protection may come at an additional cost, and it is important to check the terms and conditions of the add-on before purchasing it.

Q: Can I transfer my no-claims discount to another insurer?

A: Yes, you can transfer your no-claims discount to another insurer when you switch car insurance companies. When you cancel your policy with your current insurer, they will provide you with a proof of no-claims discount certificate. You can then provide this certificate to your new insurer, who will use it to calculate your new premium. However, it is important to note that not all insurance companies accept no-claims discount certificates from other insurers.

Q: What happens if I sell my car?

A: If you sell your car, you can usually transfer your no-claims discount to your new car. You will need to provide proof of your no-claims discount to your new insurer, who will use it to calculate your new premium.

Q: How long does my no-claims discount last?

A: Your no-claims discount will last as long as you continue to drive without making any claims on your car insurance policy. If you make a claim, your no-claims discount may be reduced or lost completely, depending on the terms and conditions of your policy.

Q: What happens if I have a break in my car insurance policy?

A: If you have a break in your car insurance policy, your no-claims discount may be affected. Some insurance companies may reduce or reset your no-claims discount if you have a break in your policy. It is important to check the terms and conditions of your policy to see how a break in your policy may affect your no-claims discount.

Q: Can I use my no-claims discount on other insurance policies?

A: No, your no-claims discount can only be used for your car insurance policy. It cannot be used for any other insurance policies, such as home insurance or life insurance.

Suppose the claims arise from accidents or theft/attempted theft activities; you may need to pay applicable excesses and face a reduction in no-claims discount. And, in the event of a claim arising from vehicle loss/damage due to extreme weather, you may still need to pay relevant excesses, but the claim might not affect your no-claims discount. It depends on your insurer.

Some insurers may add your current driver rating to your new insurance policy certificate. However, you can’t apply it to a policy purchased for another vehicle. Also, if you don’t drive for some years, you may quickly lose your accumulated no claims rating.

Even when you can make use of a no-claims discount with various motor warranty policies (provided you are eligible), comprehensive car insurance is the only policy that can cover your vehicle’s loss or damage for broader events. In contrast, third-party fire and theft can cover your vehicle for limited events like fire/theft/attempted theft. With car warranty services comparing benefits, discounts, and requesting quotes can be hassle-free before you sign up for a policy.

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