Dial Directs Bucks Back Bonus

Insurance customers are used to paying their premiums every month, and not getting anything back, except in the case of a claim. Nowadays though, some short-term insurance companies reward their customers for remaining claim free. As a result, customers are seeing the benefits of protecting their possessions properly.

Dial Direct Insurance is one such company, providing its clients with a Bucks Back Bonus that either repays the client his first year's premiums, or 25% of the total premiums paid, whichever is the lesser, after four uninterrupted claim-free years. What differentiates Dial Direct's cash back bonus from the pack is that policyholders do not forfeit their bonus if they submit certain claims which fall into permitted categories, such as windscreen claims or vehicle theft claims, if the vehicle is fitted with a tracking device.

Fabian Angiers, general manager of Dial Direct, explains that the cash-back bonus was introduced to incentivise clients to be more cautious with their possessions, thereby managing their claims. "The cash-back bonus aims to discourage clients from claiming for small items such as sunglasses or other small-scale losses. However they do have the necessary cover should they suffer a significant burglary or should they suffer a loss as a result of a natural disaster or an accident. The bonus is paid out from the money that the insurance company saves on administering and paying out small claims," he adds.

According to Angiers, many consumers do not understand the difference between a no-claim bonus and a cash-back bonus. "With a no-claim bonus, insurers reward clients for each claim-free year that passes, often by not increasing the cost of their premium. The cash-back bonus on the other hand rewards the client with a financial pay-out for remaining claim free for a specified number of years, as a result of their being more vigilant and careful with their possessions."

In Dial Direct's case, the time frame is four years. For other insurers, it ranges from two to five years. The prerequisite is that the client must remain with the insurer for a required number of years in order to receive the bonus, paying all of the relevant premiums within the specified period. With Dial Direct, the client will be paid out for 25% of the grand total of the premiums they have paid over the period, or the first year's premium, whichever is the lesser. Angiers explains that the reason for this payout structure is that clients may insure their car, buildings and household goods in the first year, but cut back on cover in the ensuing years. The first year's premium would therefore be significantly higher than those that follow, which would not be an adequate reflection of the money due in a cash-back bonus situation.

Angiers concludes, "If you prefer to take a more sensible route, use your bonus to pay off a debt or put it away in case you need to pay an excess. Otherwise, reward yourself. You deserve it - it is a bonus after all! Go on holiday, buy something you've been hankering after or use the cash as a deposit on a new car. Have fun with your hard-earned money!"

Dial Direct Insurance offers short-term insurance direct to the consumer, with super-low premiums, super rewards and super service. Independent research, commissioned by Dial Direct in 2004 to identify the most preferred of three alternative cash-back "bonus" schemes available in the short-term insurance market, found that Dial Direct's Bucks Back Bonus was the most preferred by 65% of the consumers sampled.