24 December, 2018

What does protected no claims mean on car insurance?

Whilst you are searching for car insurance, you may feel overwhelmed by the number of options different insurers may present you to keep your vehicle safe. Not only can the amount of insurances offered be unnecessary in regards to your needs, but you need to consider whether the additional charges will be worth it. This is why it is incredibly important to consider whether or not you should invest to protect your no-claims discount on your car insurance.

What is a no claims discount for car insurance?

If you have been driving for one to five years, depending on your insurer, and have not made a claim on your insurance policy in regards to an accident or repair, then this could allow you a “no claims discount”, or a “no claims bonus” (NCB), for your car insurance. However, please note that the amount of worth of the discount varies from insurer to insurer.

Once you have earned more than three years on your no claims bonus, then you can reach out to your insurers to “protect it” through an insurance policy. This means that you will pay an additional fee to your insurance company. In return, your no claims bonus will be completely safe-guarded, even if you end up having to make a claim that was due to an accident where you were at fault.

Earning your own NCD could lower your insurance premiums as much as 65%. Every year that you are insured without making a claim, then you will find that you will earn an additional NCB. Some companies even offer faster policies where you can earn this bonus in as little as 10 months rather than 12 months.

How can it affect your car insurance?

If you are looking for a way to discount any expensive insurance claims, then no claims discount car insurance could be the perfect way to distance yourself from any steep premiums. If you end up having an accident where you are the person at fault, then having a “protected” no claims discount can mean that insurers cannot take back the discounts that were originally promised to you. This can be extremely useful if you are a new driver and are looking to ensure your first vehicle. It could also be useful if you are named on a multi-car insurance policy but not on its account.

Potential Problems

Whilst you may be saving money by protecting your no claims discount, this will depend on which insurer you go to protect your vehicle. Recently, some insurers have been adding to their premiums despite claiming that this will not happen if you invest in the “protection,” with some motorists paying an additional £33 (on average) on top of their annual car cover. Oliver Cheshire, car enthusiast, after having two minor claims on his policy has even said:

“The protection hasn’t saved me money, it’s cost me money, but I’ll never stop the protection.”

For most insurers, this will not happen, but if you do not do your research into the best insurers, for instance by going on insurance comparison websites, then it may cost you more to invest in protection. This is because you may pay more for the premium than the discount you receive due to your NCB. In order to prevent any additional confusion for customers in the future, all sales material on insurance websites must say how much the NCB is worth and how much it will save you in the event of a claim. This way the customer can remain fully informed and decide whether or not they think their vehicle is worth “protecting”.

Is it worth it?

If you reach out to the correct insurer, such as Call Wiser, then it is completely worth investing in protection for a No Means Discount, as it can save you a lot money on your car insurance premiums. However, to find the best deal, be sure to always read the fine print of any contract your insurer may give you. Your insurer may adopt a sliding scale when reducing an NCD, so be sure to consider your policy and whether it suits your daily travelling routine.

You should also look into a number of different insurers when considering NCD protection policy. Either go to comparison websites or go search for insurers, once without the cover and another time with the cover. Then you can actually see how much you are potentially saving or losing and make your decision based on whether you truly need the protection.

Finally, you should always remember that you are paying to protect your discount, not the actual amount of the insurance premium. Even if you make a claim, this may mean that your premiums will rise as a result anyways. But if an accident occurs and you are not at fault, then you will still remain protected.

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