Those who drive accident-free for many years are rewarded by the insurance company and have to pay a lower insurance premium. In this article, you will find out exactly what a no-claims bonus is, what role it plays in the vehicle fleet and how the calculation works.
What does no-claims bonus mean?
The no-claims bonus system, or SF class for short, is used by insurance companies to determine the premium amount for motor third party liability and fully comprehensive insurance. The SF class is based on the number of accident-free years a policyholder has had.
Drivers who remain accident-free for many years are classified as a lower risk, which generally leads to lower insurance premiums. A driver in SF class ten has therefore driven accident-free for ten years. The system is designed to reward safer driving and motivate policyholders to drive carefully.
For motor third party liability insurance and fully comprehensive insurance, the no-claims bonus classes are calculated independently of each other. The no-claims bonus does not play a role for partially comprehensive insurance.
How many no-claims classes are there?
The distribution of no-claims classes varies between insurance companies. As a rule, there are 50 no-claims classes as well as the special classes ½, S and M. These have the following meaning:
- SF class ½: Drivers who have held their driver’s license for more than three years and are insuring a car for the first time start in this special class. As a rule, the insurance premium to be paid exceeds the basic premium by around 100 to 140 percent.
- SF class S: If drivers in SF class 1 cause an accident, the insurance company downgrades them to this class. As a result, the premium increases considerably and is around 50 to 175 percent higher than the basic amount.
- SF class M: If novice drivers in SF class 0 or ½ are at fault for an accident, the insurance company downgrades them to the malus class. Owners who report several claims within a year are also classified in this class. In no-claims bonus class M, you pay the highest premium rate, which is up to 280 percent of the basic amount.
Is the no-claims bonus also relevant for the vehicle fleet?
The SF class also has a direct impact on insurance costs in the vehicle fleet. However, as part of fleet management , some insurance companies offer special fleet tariffs that set a uniform premium rate for all vehicles. In doing so, they take into account the claims history of the entire fleet and not of individual vehicles. Well thought-out claims management can help to settle minor claims efficiently and thus avoid a downgrading of the no-claims bonus.
How is the no-claims bonus calculated?
With each accident-free year, the insurance company classifies the driver in the next higher SF class. A novice driver usually starts in SF class 0. If they do not cause an accident for a year, they are classified in SF class 1, after two accident-free years in SF class 2, and so on. If there is an accident caused by the policyholder, the insurance company downgrades the policyholder. Exactly how many classes depends on the conditions of the insurance company and the number of reported previous claims. This means that even someone who has driven accident-free for 10 years can be downgraded to SF class 4 after an accident.
Will I lose my SF class if I change my insurance?
As a rule, policyholders can take their SF class with them when they change insurance providers. However, this does not mean that the new insurer has to accept it. The reason for this is the discount protection: Many insurance companies offer their customers the additional service that, for an extra charge, the SF class is retained despite a reported claim and the insurance premium does not increase. Discount protection is usually valid for one claim per insurance year. However, many insurance companies calculate the SF class on the actual number of accident-free years driven, regardless of the discount protection.
