You’ve heard the term from your agent or seen it in your renewal letter, but it was never explained.
The bonus-malus system directly affects your premium. It can save or cost you hundreds of euros yearly. Knowing how it works matters for every driver.
I’ll explain what the bonus-malus system is, how it impacts your premium, and how to improve your bonus.
Now, let’s take a closer look at what the bonus-malus system actually is.
The bonus-malus system is a reward-and-penalty system used by insurance companies to adjust your premium based on your claims history.
- Bonus means reward. No-claims discounts reduce your premium.
- Malus means penalty. Filing a claim increases your premium.
The system promotes safe driving. No accidents means lower premiums; accidents mean higher premiums. This is fair because accident-causing drivers cost more.
Every driver starts at a set bonus-malus level, usually 0, 1, or a neutral level.
How Bonus-Malus Levels Work
Details vary by country and insurer, but the logic remains the same.
Typical bonus-malus structure:
- You move down a bonus level each claim-free year, reducing your premium by about 5%.
- You move up malus levels for each claim. Each adds roughly 5%-10% to your premium.
Example of a typical scale:
- Level -3 (maximum bonus): 45% discount on base premium
- Level -2: 40% discount
- Level -1: 35% discount
- Level 0 (neutral start point): 0% discount or penalty
- Level +1: 10% penalty
- Level +2: 25% penalty
- Level +3 (maximum malus): 50% penalty or more
If you start at level 0 and make no claims for 3 years, you may reach level -3 and receive a 45% discount. An at-fault accident may raise you to level +1 or +2, costing your discount or adding a penalty.
How Many Years Without Claims to Get the Maximum Bonus?
The number of years required to reach the maximum bonus varies. Most systems require 3 to 5 years without claims.
Typical progression:
- Year 1 without claims: Move from level 0 to level -1 (5-10% discount)
- Year 2 without claims: Move from level -1 to level -2 (10-20% discount)
- Year 3 without claims: Move from level -2 to level -3 (15-30% discount)
- Years 4 and 5: Continue moving down to the maximum bonus. Some systems take up to 10 claim-free years to reach max bonus.vel.
But what happens if you need to file a claim? Here’s how it affects your bonus-malus level. Many are surprised: A claim raises your premium for years, not just the deductible.ars.
Typical malus progression after one claim:
- Before claim: Level -3 (45% discount)
- After one claim: Move to level 0 or +1 (0% discount or 10% penalty)
- Premium increase: 45% to 55% higher than before the claim
After a second claim within a short period:
- Move to level +2 or +3 (25-50% penalty)
- Premium increase: 70% to 95% higher than before the first claim. The malus penalty lasts several years. You must go years without claims to regain your bonus level.vel.
Does Every Claim Affect Your Bonus? No. Usually, only at-fault claims affect the bonus-malus system.ent.
Claims that typically affect your bonus:
- Accidents where you are found at fault
- Single-vehicle accidents (hitting a tree, sliding off the road)
- Claims where fault cannot be determined (often treated as 50% at fault)
Claims that typically do NOT affect your bonus:
- Accidents where the other driver is clearly at fault, and their insurance pays
- Windshield claims (in many policies)
- Theft claims (varies by insurer)
- Fire damage claims (varies by insurer)
- Claims where you have a specific “bonus protection” add-on
Always ask your insurer if a claim will affect your bonus before filing.: Is It Worth It?
Many insurers offer “bonus protection” as an add-on. This means your bonus level will not decrease after your first at-fault claim. You keep your discount even after an accident.
How it works: You pay a small additional premium each year. After an accident, your bonus level stays the same. Your premium does not increase.
Is it worth it? The answer depends on your current bonus level.
If you have a high bonus (maximum discount), bonus protection is often worth it. One accident could cost you years of discount accumulation. The small annual fee protects against a large potential loss. If you have a low bonus, protection is less valuable. You have less to lose.ose.
Our recommendation: Add bonus protection once you reach level -2 or -3 (20% discount or more). The cost is usually low, and the protection is valuable.
How to Improve Your Bonus Level. Improving your bonus takes time, but you can use strategies to protect and boost it.nus.
Drive safely. This is obvious but essential. Every year without a claim moves you closer to the maximum bonus.
Avoid small claims. If the damage is minor (€300-500), consider paying for repairs yourself. The cost of a claim may be small. The cost of losing your bonus for several years can be high.
Example: You have a 40% bonus (saving you €400 per year on a €1,000 premium). You have a minor accident with €400 in damage. If you file a claim, you lose your bonus for three years. Total cost: €400 (repairs) + €1,200 (lost discounts over three years) = €1,600. Paying for the repair yourself costs only € 40. Check your policy before filing. Ask: “Will this affect my bonus? How much will my premium rise?” Sometimes it’s cheaper to pay out of pocket.ket.
Keep your policy active. If you cancel your insurance, you may lose your accumulated bonus. Most insurers honor your bonus level if you switch to another company. But if you have a coverage gap, you may have to start over.
Switch insurers carefully. Your bonus level is attached to you, not to your car or your insurer. When you switch companies, your new insurer should honor your current bonus level. Ask your old insurer for proof of your bonus before switching.
The Bottom Line
The bonus-malus system rewards safe drivers with lower premiums and penalizes drivers who file claims. Each year without a claim moves you to a higher bonus level, typically saving 5-10% per year. The maximum bonus is usually reached after 3-5 years without claims.
Filing an at-fault claim moves you to a lower bonus or malus level, increasing your premium. The penalty can last for several years.
Protect your bonus by avoiding small claims, adding bonus protection once you have a significant discount, and always asking your insurer about the impact before filing a claim.
Your bonus level is one of the most valuable assets in your insur
