What is the No Claims Bonus?

The No Claims Bonus, often referred to as No Claims Discount, is a system used by insurance companies, including those like Elephant.co.uk, to reward policyholders for not making claims during a specific period of time. Essentially, the longer a policyholder goes without filing a claim, the greater the discount they may receive on their insurance premium when it is time to renew. Typically, insurers may allow policyholders to accumulate their No Claims Bonus over several years, with each consecutive claim-free year resulting in more significant savings. For example, after one year of no claims, a policyholder might receive a certain percentage off their renewal premium. This percentage often increases with each subsequent year without a claim, thereby incentivising safe driving and responsible behavior. However, it is important to note that this bonus can be lost or reduced if a claim is made, which can lead to higher premiums in the future. Many insurance companies, including Elephant, have policies in place to outline how much of the bonus is retained or lost after a claim event. For detailed information, it is advisable to check the current web page provided by Elephant.co.uk.