Swinton has found that the majority of British drivers do not understand the difference between no-claims bonuses work and no-claims discounts, leading to them potentially wasting their money.
With 56% of drivers not knowing the difference between the two terms, the insurer also found that 47% of drivers did not know that a no-claims bonus of five years or more can get you a discount of between 40% and 60% on your premium.
One in five (19%) also believe, incorrectly, that if you move from one insurer to another, then you’ll lose your no-claims bonus. This prevents them from switching to a better deal.
In addition, a third of drivers surveyed admitted that they pay out an average of £251 on repairs to avoid losing their no-claims bonus. However, the bonus is only at risk in certain circumstances.
Swinton’s survey also discovered that 45% of people paying for no-claims bonus protection didn’t understand what they were paying for.
Richard Beaven, distribution director at Swinton, said: “Motorists should speak to their insurance broker to ensure they understand the cover they have and are making the most of the benefits their insurance provides.”