No Claim Bonus protection (car) - worth it?

ianmatthews

I've always wondered whether it's worth protecting my no-claims bonus.

I generally change my insurance company every year, and every time I am asked if I have actually claimed in the last 3 or 5 years. If I had claimed, I would have to answer yes to this, so surely that fact that my no-claims bonus is protected is irrelevant? (I can't imagine them saying 'he's had a crash, but his no-claims was protected, so we'll forget about it and give him a nice cheap quote"...)

I'm thinking that protecting the bonus is only relevant if you stick with the same company every year???

Anyone have any insight in this area? Cheers, Ian

aj3001

NCB is a percentage off your claim, so yes your premium would increase due to the claims, but you would still have the NCB, so 5 years could give you 65-70% off the premium, so if you are getting a premium of say £1000, because of a claim, 5 years NCB could take it down to £300-£350, whereas without the protected NCB, you would be paying the £1000 a year

MORPH3US

aj3001 wrote:

NCB is a percentage off your claim, so yes your premium would increase due to the claims, but you would still have the NCB, so 5 years could give you 65-70% off the premium, so if you are getting a premium of say £1000, because of a claim, 5 years NCB could take it down to £300-£350, whereas without the protected NCB, you would be paying the £1000 a year

I don't think thats strictly true, I could be wrong (probably am) but afaik, if you have 65 - 70% no claims and then make a claim, you don't automatically lose all of your no claims, just a proportion of it so you would maybe drop to 40% after 1 claim rather than back down to zero.

But as the OP says, yes you would have to declare a claim and yes this claim would make your premium go up, but its better than if you have to declare a claim AND your NCD has gone down because you didn't have protected NCD. You have to decide if its worth paying the extra (how much do they want out of interest?) against what you have to lose in terms of NCD if you do make a claim!

M

ianmatthews

hmmm...still not sure. Call me a sceptic, but I'm having problems believing that a protected NCB with company A would hold any weight with company B if I had actually made a claim with company A. Surely I would instantly be seen as higher risk with company B, whether my NCB was protected or not?

Maybe this is just another trick to get customers to pay more for premiums??? (I can't imagine the insurance industry wanting to do that ;-)

I might try putting some fictitious figures into some of the online sites and see how making a claim with a protected NCB actually effects the quote.

inmypocketnottheirs

ianmatthews wrote:

hmmm...still not sure. Call me a sceptic, but I'm having problems believing that a protected NCB with company A would hold any weight with company B if I had actually made a claim with company A. Surely I would instantly be seen as higher risk with company B, whether my NCB was protected or not?

Maybe this is just another trick to get customers to pay more for premiums??? (I can't imagine the insurance industry wanting to do that ;-)

I might try putting some fictitious figures into some of the online sites and see how making a claim with a protected NCB actually effects the quote.

You've got me thinking there too. I have always opted for the protected NCB but I can see the logic of your thinking. I am due to renew car insurance in the next 3 weeks so would be interested in what you discover.

In a way you have alerted my thinking that protecting the NCB is a bit like an extended warranty, are we just being fleeced for a few more quid.

The problem about this site is it makes you completely cynical!

shelly

My hubby has protected his NCD ever since I started driving He figures why should he lose it all if I have a scrape? Also we just know that the year we don't protect it will be the year we have a crash and lose the lot. We also change our ins co every year, I think we have stayed with the same co maybe 2 years running once.

Twice I've pretended I don't know if hubby has any NCD just to see what the quote would be. I got the quote then called back awhile later to say I'd spoken to hubby and he has full NCD which he would like protected......How much extra will that be? The quote went down alot due to max NCD then they added £40-£50 to protect it. It still worked out cheaper to protect than not.

shelly

ianmatthews wrote:

hmmm...still not sure. Call me a sceptic, but I'm having problems believing that a protected NCB with company A would hold any weight with company B if I had actually made a claim with company A. Surely I would instantly be seen as higher risk with company B, whether my NCB was protected or not?

Have just read your post again. I agree with you that company B will still see you as a risk but as you have protected your NCD then you can still go to them with max NCD and not just 1 or 2 years (or whatever it would go down to)

djohn2002uk

shelly wrote:

My hubby has protected his NCD ever since I started driving He figures why should he lose it all if I have a scrape? Also we just know that the year we don't protect it will be the year we have a crash and lose the lot. We also change our ins co every year, I think we have stayed with the same co maybe 2 years running once.

Twice I've pretended I don't know if hubby has any NCD just to see what the quote would be. I got the quote then called back awhile later to say I'd spoken to hubby and he has full NCD which he would like protected......How much extra will that be? The quote went down alot due to max NCD then they added £40-£50 to protect it. It still worked out cheaper to protect than not.

What is the point in paying extra for a protected NCD if you change insurers after a year?
The whole idea of protecting it is to keep your premiums down the following and subsequent years. It does absolutely nothing for the person who moves companies every year (unless you have a full NCB and you can find a new company who will start you off on the same terms) and very little if you change every other year because you will not be building up enough benefit to be worth protecting.
The protected NCB is only relevant to your present insurer.

shelly

djohn2002uk wrote:

What is the point in paying extra for a protected NCD if you change insurers after a year?
The whole idea of protecting it is to keep your premiums down the following and subsequent years. It does absolutely nothing for the person who moves companies every year (unless you have a full NCB and you can find a new company who will start you off on the same terms) and very little if you change every other year because you will not be building up enough benefit to be worth protecting.
The protected NCB is only relevant to your present insurer.

I'm a little confused by your post. Do you think we would keep protecting it if it wasn't worth it? The NCD goes with you whether you change evey year, every 2 years or every 10 years. NCD is NOT just recognised by the insurer you earned it with. Every year I call round for new quotes I get asked.....Does the policy holder have any NCD? I say....Yes maximum and he wants it protected please.....They say we have to send them proof of NCD from last insurer which we do. We have never had any problems with this.

Hubby has 16 years of NCD so yes its worth protecting.

SpencerCourt

I would be surprised if an insurer would accept new business merely on production of a renewal invitation showing an NCD discount offered by a previous insurer. Surely a new insurer asks you to disclose any previous claims? OK if you have not had any previous claims within 6 or so years, but if you have had, say, 4 fault claims in the previous six years (many "protected" NCDs allow 2 claims in 3 years on that insurer's policy without loss of NCD on that insurer's policy), would your new insurer really be expected to take on your risk, a driver who has had four accidents, all your fault, and which had cost your previous insurers, £?????????????? , without penalising you on your premium? And also protect you with a full no claims discount? I don't think so!

inmypocketnottheirs

SpencerCourt wrote:

I would be surprised if an insurer would accept new business merely on production of a renewal invitation showing an NCD discount offered by a previous insurer. Surely a new insurer asks you to disclose any previous claims? OK if you have not had any previous claims within 6 or so years, but if you have had, say, 4 fault claims in the previous six years (many "protected" NCDs allow 2 claims in 3 years on that insurer's policy without loss of NCD on that insurer's policy), would your new insurer really be expected to take on your risk, a driver who has had four accidents, all your fault, and which had cost your previous insurers, £?????????????? , without penalising you on your premium? And also protect you with a full no claims discount? I don't think so!

Unless I have completely misunderstood your post, that is exactly how it works. Insurers share a database that will verify if you have made any claims, you then tell them if you have any NCD, which would have been protected if that was opted for, and then you are quoted accordingly.

I have been doing this for about the last 20 years, have 3 sets of NCD all earned seperately and all protected.

But I am coming around to ianmattthews point of view.