Drivers could save hundreds of pounds on their car insurance if they have a year of no claims as coverage prices reach record highs.
Car insurance prices plummet by £745, or almost one-third (32 per cent), after a year of no claims discount, according to new research.
When a driver comes to renew their insurance and they don’t have any claims, their providers will offer no claims discounts or bonuses.
Recent data from Compare the Market shows that the discount rises the longer someone drives without making a claim.
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Some drivers with 10 years of no claims could save £1,772
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Premiums fall significantly in the second year of no claims by £354 (23 per cent) and £219 (18 per cent) in the third year of no claims.
Drivers who do not make a claim against their insurance policy for 10 years will save an average of £1,772 compared to those without a no claims discount.
Many factors influence the pricing of a premium including age, address, the make and model of the car and its annual mileage.
Despite this, having a no claims discount could provide an extra factor in lowering their insurance premiums.
Julie Daniels, motor insurance expert at Compare the Market, said: “The easiest way to check your no claims discount policy is to look at the documentation provided by your insurer, which may have been sent in the post or might be available online.
“If you cannot find the details in your renewal notice or other paperwork, you may wish to get in touch with your provider directly.”
The comparison site warned that the no claims discounts could be particularly important for younger drivers who are concerned about expensive prices.
Almost three-quarters of younger drivers are worried about how to afford their policy, while a further 24 per cent admitted to struggling to pay.
According to Compare the Market, the average price for comprehensive car cover is £950 per year, although these costs are far higher for younger people, potentially up to £3,000.
Research suggests that car insurance premiums have increased by £546 year-on-year with one year of no claims and even a £186 (54 per cent) rise for those with 10 years without claiming.
Insurance experts have pointed to more expensive repairs as being the key indicator for car insurance costs rising in price.
Julie Daniels added: “While drivers could certainly make significant savings through a no claims discount, insurance premiums remain high even for motorists with no recent claims.
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Most younger drivers are concerned about how they will afford their car insurance payments
PA
“It is important that any driver who is looking to save money on their car insurance compares deals and prices online ahead of their policy renewal.”
Using a comparison site to see the available offers for insurance could help motorists save as much as £578 per year.