Protected No Claims, is it worth it?

Annie_SW

Going back to protecting your NCD. I have 5 years protected NCD, but in the last 2 years 1 theft claim, and now 1 accident claim - at this point there is no point still protecting my NCB is there ?

Mumstheword

That depends on the scheme Annie.
It may be that your protection covers you for say 2 claims in any 2 years, in which case one of your claims may drop out of the two years during the next period of insurance, and so, yes, it would be a good idea to still protect your ncd.
On the other hand, if your ncd will drop regardless of protection following a claim in the next insurance year, then no, it isnt worth protecting it again from renewal.

You need to - 1 - ask your insurance company what their protection covers
-2- if you have used up all of your protection lives, you could phone around to see how other companies would treat your ncd situation. You never know, another company may have a more flexible bonus protection scheme, and may allow you to transfer with full protecteed bonus (two lives lost), but then have more lives remaining on their scheme than your existing one.

The first step is to see how many lives you currently have left, and when your oldest claim drops out of that, to give you another life back.

feel free to pm if you need more assistance,

Mumxx

Mumstheword

MarkyMarkD wrote:

Mums' example re the £50 isn't right. NCD protection normally costs 15% of the basic premium - it's not a fixed amount. So it's equally good/bad value for customers with any size of policy.

I was using £50 as an example, £40-£50 was mentioned in the first few posts. I didn't intend to suggest that this was the cost in all circumstances, sorry if it came across that way.

MarkyMarkD wrote:

So, if you expect to claim more than once every 5 years, it's worth paying for the protection. If you don't, it's not worth it.

I DO NOT buy NCD protection. My wife and I have two cars. We've had no blame-worthy accidents in all of our joint 30 years of driving (and having insurance).

We haven't had any blame worthy accidents/incidents either, but due to circumstances, our own insurance companies have been involved and paid out a few times.

NCD protection is just another form of insuring against a loss, and your comments about whether or not it is worth it could apply equally to any non compulsory insurance. For example, house contents. I have lost out as I have never claimed, yet paid my premium each year. It's all about the 'what if's'. If I were to have a fire/burglary, I wouldnt be in a position to replace my belongings without insurance. Likewise, some people might not be in a position to pay the increase in premium following a claim without protected NCD. You could put these costs in a savings account each year, and possibly (probably) end up better off, but a couple of incidents in the early years could easily see you very much worse off. Protection payments take away part of that risk.

bonvonnie

I have no claoms protected, and i always asks for quotes with and without, and the difference is like £75!!! and that seems to bump up the premuim alot.

MarkyMarkD

Mumstheword wrote:

NCD protection is just another form of insuring against a loss, and your comments about whether or not it is worth it could apply equally to any non compulsory insurance. For example, house contents. I have lost out as I have never claimed, yet paid my premium each year. It's all about the 'what if's'. If I were to have a fire/burglary, I wouldnt be in a position to replace my belongings without insurance. Likewise, some people might not be in a position to pay the increase in premium following a claim without protected NCD. You could put these costs in a savings account each year, and possibly (probably) end up better off, but a couple of incidents in the early years could easily see you very much worse off. Protection payments take away part of that risk.

Oh absolutely, but IMHO protection is a particularly poor value form of insurance for many people.

I also don't believe in insuring amounts which you can afford to lose. If your house burns down, you lose a HUGE amount which nobody can possibly afford to make up - so not having house insurance is madness. If your car gets damaged and it's comprehensively insured, all you lose is some no claims discount and your excess - say around £500 max for most people (even if their insurance is expensive). Far less for me or my wife given our age etc. (Our motor insurance premiums are around £150 and around £280 IIRC).

Insurance is almost always, by definition, bad value. Insurance companies have to cover their claims costs, and their admin costs, and make a profit. And then the premiums are subject to IPT. So my approach is to insure the necessary things and not to insure things which I can afford to take the risk of self-insurance.

Jonn

Derrick is probably right about NCB protection. A friend has had one £650 claim made fraudulently against her insurance this year (another matter) paid out without even requesting a statement from the policy holder. Now she wants to renew her policy and finds that the premium is £600 higher. She finds another insurer willing to accept her 6 years NCB (not knowing that the claim had been accepted) at £500 less.

When she requests her proof of NCB to pass on to the new insurer it comes back with the details of the claim on it and the statement that she has "5 years PROTECTED no claims bonus". This could be interpreted as advice to the new insurer that actually there is no real NCB. If she submits this as it has been returned I would be very suprised if her quote is still valid. Hence we will focus on extracting a "clean" NCB statement before we reinsure.

The entire concept of protected NCB is highly fallible because of transfer issues. Any quality insurer is going to assess you on your risk of having an accident. Any decent risk model is going to ask you what accidents you have had and judge accordingly totally ignoring how much extra profit you contributed to another insurers bottom line. The irony is that if you are risk adverse you are probably a good driver BUT also likely to want to insure the uninsureable Actually thanks to all those who contribute an extra 15% a year to paying off fraudulent or uninsured claims for the rest of us.

dacouch

Jonn wrote: »

Now she wants to renew her policy and finds that the premium is £600 higher. She finds another insurer willing to accept her 6 years NCB (not knowing that the claim had been accepted) at £500 less.

When she requests her proof of NCB to pass on to the new insurer it comes back with the details of the claim on it and the statement that she has "5 years PROTECTED no claims bonus". This could be interpreted as advice to the new insurer that actually there is no real NCB. If she submits this as it has been returned I would be very suprised if her quote is still valid. Hence we will focus on extracting a "clean" NCB statement before we reinsure.

.

Your friend needs to make sure they declare the claim

Loanranger

Derrick is incorrect in my recent experience.
I have always paid to protect my NCB, currently 70%+.

I made a claim in March, a minor at fault bump with no other vehicle involved. At renewal earlier this month, insurer said underwriters had increased my premium by 60%.
Used moneysupermarket.com to find better deal, declared the claim and got insurance for less than I paid 12 months ago, prior to the claim.

Ian_W

Loanranger wrote: »

Derrick is incorrect in my recent experience.

But Derrick might have been correct when he posted in 2005!!

Rossie_Geo

I've just had an accident - I skidded into the back of a car so it was my fault.
I have a Protected NCB with Saga - currently 60%
Following the accident my Car was written off.
Comparing quotes on Confused.com I got the following results (I've only listed the top 2 cheapest quotes)

1. A Baseline quote as though I had NOT had an accident - Ticked the '6 years current NCB' box, ticked the 'Yes I have a protected NCB' box. Result £185.00/£202.00
2. (Being truthfull) I declared the accident, ticked the '6 years current NCB' box, ticked the 'Yes I have a protected NCB' box. Result £215.00/£224.00
3. Imagining I had lost my NCB through NOT having a protected NCB, declared the accident, ticked the 'ZERO years NCB' box. Result £375.00/£488.00

So, in my case, it seems that having a protected NCB DOES make a big difference.