“Protected” no claims, is it worth it ?

AnotherJoe

Just going through insurance for a new car and one of the options is to protect my NCD.

However I recall many years ago having an accident (hands up my fault) and despite me keeping my NCD my insurance still doubled the next year, so I’m not convinced it did me any good, and when filling in my details, via a compare site, I had two questions to answer, did I have NCD and had I had an accident in the last 5 years. So, are these really separate or would I be needlessly be paying £30 for protected NCD which would be pointless ?

FreddieFrugal

You keep your discount - but the discount is coming off a much higher base price because you had an accident.

Your price would have been even higher had you not had the NCD protection.

Joe_Horner

Like all insurance, it's essentially gambling - with the odds loaded in favour of the "bookie" like any other form.

If they've done their sums right then that means the overall extra take in "protection" premiums will be more than they "give away" in NCD that would otherwise be lost.

So you pays yer money (or not) and takes yer chance.

Personally, I've always paid nothing but the basic and then avoided getting into situations where the optional extras might be needed

JustAnotherSaver

Joe_Horner wrote: »

Personally, I've always paid nothing but the basic and then avoided getting into situations where the optional extras might be needed

Interesting.

So you're parked up out of the way of everyone else but when you come back to your car it's been bumped.

Do you just then not repair it? Or do you take the hit & claim?

System

If you've got a fair whack of NCD its not worth protecting. If you have only a few years it is. Reason is that for someone with say 8 or 9 years or more NCD in the event of a single claim they don't lose the lot unlike someone in their first few years of getting NCD. It'll get dropped down to something like 4 to 5 years. So they're still going to be getting a decent discount with 4 or 5 years NCD and the difference between that and what it would be with 8 years NCD doesn't make it worth paying what can be a significant amount to protect it over several years.

Unfortunately far too many people mistakenly believe that if they have protected NCD then it means in the event of a claim their insurance won't go up.

wongataa

Tarambor wrote: »

If you've got a fair whack of NCD its not worth protecting. If you have only a few years it is. Reason is that for someone with say 8 or 9 years or more NCD in the event of a single claim they don't lose the lot unlike someone in their first few years of getting NCD. It'll get dropped down to something like 4 to 5 years.

If you have more than 5 years NCD and you make a claim you will usually end up with 3 years NCD as the claim will take 2 off but they tend to limit you to 5 years NCD for the sum.

paddyandstumpy

Tarambor wrote: »

If you've got a fair whack of NCD its not worth protecting. If you have only a few years it is. Reason is that for someone with say 8 or 9 years or more NCD in the event of a single claim they don't lose the lot unlike someone in their first few years of getting NCD. It'll get dropped down to something like 4 to 5 years. So they're still going to be getting a decent discount with 4 or 5 years NCD and the difference between that and what it would be with 8 years NCD doesn't make it worth paying what can be a significant amount to protect it over several years.

Unfortunately far too many people mistakenly believe that if they have protected NCD then it means in the event of a claim their insurance won't go up.

^^^^ is incorrect

wongataa wrote: »

If you have more than 5 years NCD and you make a claim you will usually end up with 3 years NCD as the claim will take 2 off but they tend to limit you to 5 years NCD for the sum.

^^^^ is correct.

Quentin

Tarambor wrote: »

If you've got a fair whack of NCD its not worth protecting. If you have only a few years it is. Reason is that for someone with say 8 or 9 years or more NCD in the event of a single claim they don't lose the lot .......

Insurers normally only offer protected NCD to policyholders with 4 or more years already

Irrespective of how many years NCD you have, a claim normally means no ncd awarded for the current year and loss of 2 years from a maximum (which is usually 5 years).

Thus if you have 9 years NCD a fault claim could mean only 3 years to use at renewal.

Check your policy wording to see how your insurer deals with ncd following a fault claim

IamNotAllowedToUseMyName

I've tried to get this clarified as I think it is misleading, but the financial ombudsman minion was clicking his bureaucracy reply buttons and wanting me to fill in forms I'd already filled in before proceeding.

My belief is that this came out of the change in insurance market driven by Direct Line who were far more proactive in profiling their clients. Before then you had a premium and you had NCD and the NCD was the full adjustment for the claims record, so back in the 80s you would be a male 25 year old driver in a group 4 car with no convictions and that would define your premium and then the claims record would adjust your actual premium giving you a discount if you had no claims.

With the move to a more competitive market, to try and be cleverer, the claims record became a factor in the base premium, and so now you have an accident you potentially have both a loss of NCD and an increase in base premium. "Insuring" your NCD is not great value for money as it does not actually cover that great deal of money.

On any insurance, you need to look at the premium and the amount it pays out. What is the NCD element of your premiums going to be reduced by over 3 years (let's assume you are not going to have a string of accidents if you currently have reached the stage of being a settled experienced driver and have left most of the youthful hormones behind!)? I was quite surprised how little my wife's premium went up on her insurance having had an at fault accident - less than my premium went up which I suspect was due to her claims record as a named driver on my policy.

Arguably, NCD should be obsolete, the premium takes account of the claims record, and should be priced accordingly. Given that NCDs are effectively transferable across insurers, they serve no real purpose, especially as you have to declare incidents which then affect your base premium, regardless of you making a claim. I think it's all too difficult for the man in the street to assess properly.

takman

JustAnotherSaver wrote: »

Interesting.

So you're parked up out of the way of everyone else but when you come back to your car it's been bumped.

Do you just then not repair it? Or do you take the hit & claim?

Personally i always park away from other cars and in a "sensible" location and i have never had any car damaged in a car park to any of my cars.

Nobbie1967

I tend only to insure where legally obliged or for events that would be financially painful should they occur such as my house burning down or my car being stolen. For everything else, I self-insure and protect my stuff from potential loss by taking sensible precautions.

If you take all the insurance you are offered, you are just making money for the insurance industry and subsidising those less careful/lucky/honest than yourself.