protecting no claims bonus

Phartyphuk

Hi.
can anyone help.
i am carless but direct line have suggested i Suspend my policy.
however i am still paying the same car insurance,
they say it is to protect my no claims bonus and when i get a car i will get my money back minus the first 28 days.
is this right?
can i just scrap it and start anew.
anyone any advice

Quentin

You can cancel and start anew. But find out how much they will charge in cancellation fees first, and equate that against their suggestion of suspending the policy till it ends to get the NCD. (Assuming you don't already have max. NCD!)

Phartyphuk

thanks.
what is the max ncd?

Quentin

Usually 5 years, though some insurers give a small discount for more (often they have higher base premiums though, so can be a marketing exercise)

Phartyphuk

um, i have been with the same insurer for 16 years, would that be 16 years. sorry am not very knowledgeable about this

adamc260

Phartyphuk wrote: »

um, i have been with the same insurer for 16 years, would that be 16 years. sorry am not very knowledgeable about this

You may have 16 years claim free driving but MOST insurers only recognise 5 years. The reason is that each year equates to discount. If they kept giving discount up till 16 years they'd either have to make each year worth less % or... they'd just end up giving the product away for free (if that makes sense). Thats why they cap it at 5 years (usually between 65-75% off the premium at 5 years)

Quentin

They won't be giving you an extra discount each year - you'd end up getting paid by them!

With most insurers you hit the top discount rate at 5 years. (Check what your policy says).

If you have 16 years, then getting another one this year won't make any difference. So see what it will cost just to cancel. If you do they will send you a proof of no claims after you cancel which most insurers will accept up to 2 years from its issue.

kev.s

plus you'll have to renew your policy withing 2 years or lose all your ncd

Phartyphuk

oh, so it seems that assuming it doesnt cost too much to cancel. I can cancel my policy and reapply within 2 years to protect it?

Quentin

yes .