Considering the cost of replacing your belongings or repairing your car, most of us can’t afford to go without insurance. But when shopping around for cover, you want to make sure you’re getting your money’s worth. Enter: The no claims bonus. Sounds good, right? But let’s dig a little deeper to see if it’s really the insurance perk it claims to be…
What is a no claims bonus?
In South Africa, a no claims bonus is often marketed as a cash reward for being claim-free for a set period—usually three years. Sounds like a great deal! But here’s what it actually means:
- If you don’t claim for three years, you receive a predetermined percentage of your premiums back.
- The catch? If you do claim within those three years, you reset the clock and lose any bonus you’ve accumulated.
Let’s crunch the numbers:
Say you’re paying R1,000 per month for car insurance, and your insurer offers a 10% no claims bonus over three years. If you remain claim-free for 36 months, you’ll get back R3,600 (R100 per month over 36 months). But…
- If you claim just once within those three years, you lose the entire bonus.
- If you claim again, the cycle starts from scratch.
So, while the idea of getting cash back sounds appealing, is it really worth paying more upfront for a ‘maybe’ later?
Why we say NO to the bogus ‘no claims bonus’
Insurance companies aren’t in the business of giving away money. The reality is, to fund a no claims bonus, insurers usually inflate your premium upfront and set that extra money aside. So, if you stay claim-free, you’re essentially just getting back a portion of your own overpaid premiums. If you do claim? Well, tough luck… That bonus is gone, and you’ve paid higher premiums for nothing!
King Price’s take: Pay less NOW, not maybe later
At King Price, we believe that insurance should be simple, fair, and affordable. That’s why we don’t play the no claims bonus game. Instead, we offer super cheap premiums from day one—for everyone. And, best of all, your car insurance premium decreases every month as your car’s value depreciates.
So, ask yourself this: Would you rather pay higher premiums upfront for a possible reward later, or just pay less now and save every month? If it’s the latter, you know where to find us.
FAQs about no claims bonuses
1. What happens if I claim during my no claims bonus period?
Your bonus resets to zero, and you have to start another claim-free cycle to qualify again.
2. Is a no claims bonus a scam?
Not exactly: it’s legal, but it’s not as rewarding as it sounds. You’re often just getting back money you overpaid in the first place.
3. Does King Price offer a no claims bonus?
Nope! Instead of charging you extra and giving you a ‘bonus’ later, we just charge you less from the get-go. Plus, your premiums decrease monthly.
4. What’s the best way to save on car insurance?
Look for an insurer like King Price that offers fair, low-cost premiums from the start rather than inflated prices with an uncertain payout later.
The final verdict
If you like gambling on ‘maybe money’, then a no claims bonus might sound tempting. But if you’d rather save every month and keep more rands in your pocket, then it’s time to ditch the gimmicks and get real savings with King Price.
Ready to pay less for car insurance? Get a quote today and start saving immediately!
