Anyone who owns a car and has it covered under a car insurance Dubai policy is mostly aware of what a no claim discount policy is. For those that are not aware, a no claim discount is a sort of reward for an insurance policyholder which they can avail for not making any insurance claims during the policy term.
Normally, you can receive it when you are about to renew your insurance policy. The rate of this premium bonus increases at the end of each year you hold the policy if you do not claim for insurance coverage or do not get involved in an accident.
Huge Savings with No Claim Discount
As the premium that you can receive accumulates every passing year, you are bound to make great savings if you drive carefully. The longer you do not make a claim, the higher the discount you may be able to avail on your car insurance premium.
According to UAE Insurance Authority Board of Directors’ decision No. 41 of 2017, you, as a driver and policyholder, are guaranteed to receive 10, 15 or 20 percent discount if you do not claim your policy for one, two or three years consistently. If you do not claim insurance for a period of five years or more, some insurance companies may even offer a 50 percent discount to you given your record and driving profile.
What Happens When You Make a Claim?
It is commonly perceived that any claim you might make will drop your no claim discount discount to zero and it will be reset. However, this is not completely true. Your no claim discount will not always drop to zero when you make a claim, it can depend on what the nature of the accident you were involved in is.
Insurance companies use a step-back feature, under which they will consider the nature, detail, and facts of the accident you were in and your discount will be stepped back accordingly. With this, you will not lose your reward by simply making one claim or due to one accident. However, this is applicable only if you were not at fault yourself in the accident. The scale according to which the amount of reduction will be decided may vary between different insurance companies. You should check your own insurance policy to get accurate details regarding the step-back feature.
Protection of your No Claim Discount
No claim discount protection is another feature you can avail that exists in the UAE. This additional feature, with an added cost, can allow you to safeguard your no claim discount value of the subsequent year, even if you make a claim in the preceding year. This is subject to limitations that vary between different insurance plans.
Some insurance companies only allow a limited number of claims that you may make before it impacts your no claim discount. Some companies may not allow this to stand if you are at fault during the accident or set a limit. However, this will not have an impact on your insurance premium, which the company can change regardless, this is only restricted to you no claim discount reward.
Transferring your No Claim Discount
The no claim discount belongs to the driver and not to the vehicle. This means that if you decide to change your vehicle you will still have your no claim Discount. This remains true even if you want to change your insurance provider. Your record will be transferred with you. The UAE Insurance Authority regulations, which came into effect in 2018, require insurance companies to provide a ‘no claim certificate’ to the drivers free of charge.
We have listed some important points that you should remember regarding the no claim discount policy:
- You can receive your no claim discount only at the time of Insurance Renewal
- The no claim discount is associated with the driver and not the vehicle
- You can transfer your No Claim discount even if you change your vehicle or Insurance provider.
- If you are at fault, your claim may be affected in line with your insurance policy. If you are not at fault, it will generally not affect your no claim discount if you claim insurance.
Each Insurance company usually has different rules and policies, so it is best for you to confirm and gather details from your insurance provider.
This article has been constributed by https://www.buyanyinsurance.com