What is the reason to have no-claim bonus protected if insurer will ask about claims?

Accident history indicates the sort of risk you may be.

If you pay the extra premium to protect your no claims bonus the Insurer you pay the extra premium to agrees not to reduce your no claims bonus (This is a discount ranging from between around 60% to 70% off your premium). They agree not reduce your no claims discount providing you do not have more than normally two fault claims* with a set period usually either a 3 or 5 year period. Some companies "Guarantee your no claims bonus and in theory there is no limit to the amount of fault claims you can have.

In general terms if you had one fault claim in three years you would not lose your no claims bonus but may attract a premium loading of say 10% for having a fault claim (Many companies will not load for one claim).

If you had not protected you no claims bonus you would normally lose 2 years of your no claims bonus which with most companies would mean your no claims discount would reduce from 65% to 50%. On a premium of £250 this would probably increase your premium by upwards of £70. In addition you may also attract a loading for having a fault claim of around another 10%.

If you have protected no claims bonus and have had a claim most (Not all) other Insurers will allow you to transfer to them with protected no claims bonus. They will normally deduct one of your "Lives" from your protected no claims bonus.

* A fault claim is normally regarded as a claim where the Insurer cannot recover them amount they paid out for a claim for instance an accident that was your fault, malicious damage, fire, theft, other driver leaving the scene of the accident without leaving their details or being hit by an uninsured driver (Some companies do not count being hit by an uninsured driver as a fault accident). Most companies do not regard a windscreen claim as a fault claim.

Most drivers start to protect their no claims bonus when they achieve maximum bonus and their age is acceptabe with the insurer etc as it provides peace of mind as the chances of their premium increasing through claims is reduced. The other reason is say your car gets hit in Tescos car park and the other driver kindly leaves the scene which is quite common now. You could claim on your policy with a minimal increase in premium and just have to pay your policy excess. If you did not have protected bonus it is often not worth claiming for minor damage after you take into account the increases in premium and your policy excess.

I personally recommend that the average driver paying a lowish premium keeps their excess low say £100 if they have protected no claims bonus so if they have say a hit and run in a car park they can put the claim in.

I hope this clarifies it for you, if not speak to your Insurer / Broker.

P.S Insurers only allow you to add Protected No Claims Bonus when you take the policy out or when its due for renewal.

No - check out from the policy how many claims allowed before no claims is affected. It's often 2 in a year before you "lose" any ncd when you have protected.

Don't know of any company that would apply a load of 100% for one claim its normally zero or upto 15% (25% if your unlucky). I'd rather have a small load like that than the load and lose my no claims bonus.

Your paying to protect your no claims bonus your not paying to stop any claims loading.

I will grant you a lot of people do not realise when they take out protected no claims bonus they might get a loading if they have a claim. That is an issue that the Insurers need to ensure is made clear

the whole "50% NCD discount" is another con

how would you feel if you went to M&S and they were advertising a "50% off sale" and you noticed prices were only 25% lower than normal only to be told "well we always give 25% off every day of the year"

it's a nonsense (in my opinion of course)