How Your Insurer Calculates Your No Claims Discount
You may be under the impression that with a No Claims discount of, for example, 60%, this will mean 60% off the cost of the car insurance quote. That's quite understandable, after all, it's a logical assumption and the one the most people would make.
Unfortunately though, this almost certainly won’t be the case. The fact is that the term is a little confusing and does perhaps suggest that the way you save money on your car insurance quote is straightforward - 60% off, end of story. Far from it.
Yes, you will get a No Claims discount and it may well be a discount of 60%, but the question is 60% of what? Everything depends on how the car insurance company does its calculations.
Your insurance premium is based on lots of different factors, only one of which is the No Claims discount to which you are entitled. With most insurers, the No Claims discount you have earned would be applied part way through the process of calculating the premium, rather than a deduction of 60% being made when all costs relating to your policy have been accounted for.
And it's not just when any applicable discounts and reductions are put into the mix that determines the premium.
There may also be circumstances which mean there are loading charges to be added. Again, the stage at which any applicable loading charges are entered into the equation has a bearing on the final cost of your car insurance quote.
Car Insurance Companies Calculate Differently
The way in which calculations are made vary from company to company, but you can pretty much take it as read that a 60% No Claims discount will not mean anything nearly as simple or valuable as a straight saving of 60% on the cost of your premium.
Compare Car Insurance Quotes to Find the Cheapest Available
So when you are looking to reduce the costs of your car insurance that's another good reason to visit a car insurance comparison site like thecomparisons.com to get quotes from a number of different insurers. Don't take it for granted that because they offer the same level of discount that it is automatically worth the same amount of money off your annual premium.
It's your No Claims discount and you've earned it, so save as much as you can with it.
Compare car insurance rates online with thecomparisons.com to find the cheapest car insurance available for you.
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