Is Protection of No Claims Discount Worth It?

mateus

I have recently had my car broken into and the stereo stolen along with other damage to dash and door. After ringing my insurance company Lloyds TSB I have been informed that I cannot cancel my policy as I have made a claim. The only problem is that my 'protected' no claims only allows 1 claim. As a result any future claims I may make will mean a loss of my no claims bonus which I thought was protected. Should the insurance companies offer longer protection? i.e. more than one claim and should I be able to cancel my policy? It seems as though protected no claims is not worth the money as the increase in my premium will be as much as the cost to protect my bonus?

Mumstheword

have just bumped another recent thread on protected ncd for you.

diff companies offer different protection packages, so some will allow more than 1 claim and still retain your ncd.

in this case, it isn't so much that you can't cancel this insurance, more that you shouldnt because you wouldn't get any refund on the years premium. this is because you have entered into a contract for a year's insurance, and you have used that insurance by claiming. so you would not get any part of year refund by cancelling it now.

If you are really worried, you could cancel this insurance and put up with the loss of money. But you'd have to check what ncd other companies would credit you with first. It would only be worth doing if you could get protected ncd elsewhere even though you've had a claim, and that the new company would offer you at least one other 'life' on that protection.

As for the increase in premium following a claim, you have to remember that it will be increased for more than one year, eg if you lose 2 or 3 years ncd, it will take that long to build back up.

MarkyMarkD

Some protection allows 2 claims in 3 years, or 2 in 5 years, or 1 in 2 years, or 1 in 3 years. It varies a lot between insurers. The "1 claim in ..." versions are particularly poor value as you've noted - as soon as you have one incident, you've lost the protection.