Protected No Claims, is it worth it?

Ciwan

Hello

My mum recently renewed her insurance, and even though she had 4 years protected no claims bonus, her renewal was way more expensive because she had made a claim.

What then is the point of No Claims protection if it isn't going to do you any good? If you've made claims, your insurance greatly increases regardless whether you've protected your no claims or not.

Just now, a lorry (guy must have been asleep at the wheel) bumped the side of her car on the motorway :eek: He was going too fast and she was in too much of a shock to write down the guy's registration number. If she makes a claim, her insurance will again go up, if she doesn't, she'll have to fix it herself and that'll be expensive, as it is a 2013 Mercedes.

Any clarification and advice would be greatly appreciated.

Thank you.

Morph4610

Ciwan, I guess the simple answer is that insurance companies often find a way to increase premiums often without reference to moral code or customer expectation. I've always taken NCD protection because I believe that if I have a claim then my premium won't change as drastically as it would had I not taken it i.e. if my maximum NCD was then being reduced. Though I can't prove this definitively I have had a couple of claims over the past few years and whilst my premiums have gone up they've haven't gone up drastically. Hope this explanation helps

Faith177

The no claim bonus protection literally stops you losing your bonus you will still have an increase for the claim. However the load won't be as bad as you will still have your bonus so it will save you money in the long run.

For the average claim you will lose normally 2-3 years NCB

Aretnap

NBC protection does what it says on the tin - it protects your NCB. It doesn't guarantee that your premium will never go up, regardless of accidents, changed circumstances, market conditions etc - the only thing that would do that would be if you could find a policy that lasted several years instead of one year.

Specifically there will still probably be a loading because you've had an accident, as you'd expect. This is separate from your no claims discount, which is a discount applied to the whole premium whether or not you've disclosed any accidents.

Specifically (and the numbers are for illustration only):

Your base premium is £1000. You have 5 years NCD, giving you a discount of 70%. Your actual premium is therefore £300.

You have an accident. Your base premium goes up to £1200 to reflect this. You also lose two years NCD - giving you a discount of 50%. Your actual premium has therefore gone up to £600.

You have the same accident, but you'd protected your NCD. Your base premium goes up to £1200, but you keep your 70% discount. Your actual premium is therefore £360.

Your premium has gone up, yes, but not by as much as it would have done had you lost your NCD. Whether NCD protection is a good deal or not is a fair question (like any insurance product, it depends on how likely you think you are to need it), but it is not true that it makes no difference or that it is pointless.

If her renewal premium goes up for any reason (and even if it doesn't) it's a good idea to shop around. In insurance, as in everything else, companies change their prices year on year, so the company which was cheapest for her a few years ago won't necessarily be the cheapest today. They also have different target markets, so the cheapest for someone with a clean record may well be uncompetitive for someone who has had a couple of accidents. And they tend to give discounts to new customers, so if she stays with the same insurer year after year her premium might well drift up anyway, with or without accidents.

Ciwan

Thanks guys.

If she claims on an accident that wasn't her fault, does that too increase her premiums?

Quentin

Often


You can find out now by doing dummy quotes with and without a non fault claim on her history (no fault not meaning "blameless" but that her insurer didn't ultimately have to pay out) so the incident mentioned in the OP will be a fault claim if she makes one

csgohan4

Even if you had a non fault accident, if your insurers cannot recover all costs, in this case, no Car reg noted down, therefore no one to claim against, your premiums will go up more than if you could claim off someone else's insurance.


Bare in mind you need to let your insurer any accidents your involved in, fault or no fault, intention to claim or not.

daveyjp

I never protect no claims.

Had a claim following a hit and run. Went from max NCB to three years and existing company wanted twice as much on renewal. Shopped around and found a premium lower than I'd paid the year before!

Had a claim which had no effect on my NCB level as third party 100% liable. Existing company increased renewal quote by a huge amount and have not been competitive since. Found another company and all good again.

With protected you need to check it is transferable and isn't just protected with your existing company.

dacouch

Two claims in a short period.

Protected No claims bonus will save your mum upwards of £1k over the net four years

mattk_180

Also not quite sure what is meant by making sure the protection is transferable?


All insurers will have their own policies which either will or will not allow protection, without being affected as to whether it was protected or not on the old policy?