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Going carless: how long before car insurance no-claims benefits and good history become invalid should wish to become a car owner in future?

Update: Based in UK, would keep license. Reason for going carless is purely financial consideration. More of a medium to longer term consideration, not too serious at the moment, do fact finding at the moment. Thanks for your requests for clarification - hope this addresses them.

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    You need to ask your current insurance company since the answer might depend on the insurance company. I had two cars and sold one. My insurance company told me that I would continue to get the multicar discount on the remaining car for six months beyond the next (six-month) renewal, and if I bought a car (to replace the one I sold) within that time period, I would get the no-claims benefits on the insurance policy on the replacement car. Another company might well have somewhat different rules. What is offered if you are carless for some time period might also be different. – Dilip Sarwate Mar 7 '12 at 13:25
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    Would you be retaining your driver's license? Also, it might be helpful to disclose where you are .. insurance regulations vary by country. – Chris W. Rea Mar 7 '12 at 13:28
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    The first thing I would do is look at your most recent bill. What discounts did you receive for accident free/good driver? Are you going without a car, or forgoing a license? You might still want insurance if you will occasionally be driving a car. – mhoran_psprep Mar 7 '12 at 13:39
  • +1 x 3 everyone above for seeking clarification and making some notable points. I've clarified the question. – therobyouknow Mar 7 '12 at 13:45
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In the US That benefit only applies if you have had insurance and no claims. I suspect that is the same in the UK. The reason for these benefits is that people who do drive and consistently avoid accidents are lower risk in general. If you do not drive you are not a lower risk. In fact not having insurance or a car for any length of time increases risk so likely causing you to have higher rates.

I would talk with your agent to find out for sure with what you are planning. That said if you go for a significant length of time 1+ years with out a car then the savings for the total cost of insurance during that time would most likely exceed any savings you would get for having insurance the entire time.

  • +1 for the thoughtful observations, seen from how an actuary would perhaps see it and also comparing the savings made without a car against the increase in premium after having taken a break from driving. – therobyouknow Mar 7 '12 at 17:01
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In the UK, most insurers will honour proof of NCB up to two years old.

For example, Swiftcover say:

Your proof of No Claims must be ... less than 24 months old

  • +1 For the example. Given that insurance brokers can use the same underwriters this might apply elsewhere also. – therobyouknow Mar 7 '12 at 17:01

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