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Car Insurance Discounts explained Article

By: Almeda Glew

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No Claims Discount (NCD)

NCD is the best known of all the discounts, with reductions ranging from 30% to an astounding 75%. This discount is calculated on the number of years a policy has been fault-claim free, usually capping around 5 years. It will be reduced if you make a claim.

It's important to remember that NCD is also a 'loading factor', meaning if you have low NCD then insurers will consider you to be a higher risk and will 'load' the premium accordingly. Therefore it's virtually impossible to know how much money 75% actually represents.

NCD only applies to one policy at a time, so a second policy in your name usually has to start at zero. However, some insurers offer multi-car discounts or match your existing NCD.

Named Driver Discount (Named Driver NCD)

Named drivers don't qualify for NCD as they have not had a policy in their own name, even after driving for a number of years. But some insurers now offer NCD to named drivers, usually matching the NCD of the policy on which they have been named.

On occasion, this will become normal NCD if you stay with the insurer for a full year, but such discounts can be limited. They may be capped, or only be valid if you stay with the same insurer. But this certainly helps while you accumulate 'normal' NCD of your own.

Pass Plus Discount

The Pass Plus programme offers you extra skills and can reduce your car insurance premium as a result. Some insurers offer this discount, but premiums are often still high due to the statistical likelihood of a claim. The premium is usually only reduced if you take Pass Plus in the first year after passing your driving test and the policy is actually in your name.

Multi Car Discounts

What this means varies greatly between insurers, but if you have more than one car in the household (the cars usually need to all be in your name, or at least registered at the same address), you won't automatically get NCD on more than the first one. If you don't, it's certainly worth investigating this option.

Some insurers discount the second policy taken out with themselves, some will match the NCD from your first policy (not always with them) and there are even insurers out there who will insure multiple cars under one policy. In the last instance, it's important to check that each car will qualify for NCD if you choose to have separate policies in the future.

It's worth bearing in mind that some of these discounts may only apply for the first year, and will be replaced with NCD as you begin to qualify, and some may only apply in isolation. However, insurers have so much competition that they work hard to attract new business, including offering significant introductory discounts or reductions for setting up your policy online, so shopping around at renewal is always advisable. Remember, not all discounts are advertised so the onus is on you to find out if you qualify.

Article Source: http://depositarticles.com/

is a keen writer about car insurance quotes and house insurance products.

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