When is it worth protecting no claims

Home » Guides » No claims discount: is it worth protecting yours? Customers who drive claim-free can build up a discount on their car insurance. If you go five years or more without having to make a claim, that discount can translate into a considerable saving. However, you could lose all that without it being your fault, for instance if your car is hit by an uninsured driver.

So is it worth paying extra to protect your discount? You get a no claims discount for being a careful driver and not being in an accident where a claim is made. You could lose all that for just one accident.

You would also normally lose your discount for being in an accident with an uninsured driver, if you had to make a claim on your own insurance. The opportunity to protect that reduction might initially seem like a no-brainer. You'll continue to pay less on your premium even if you have an accident. However, before taking out Full No Claims Bonus Protection it can be worth checking with your insurer for any exceptions or limitations to the protection.

For example the protection may only apply where a claim made against you is under a certain financial amount or your protection may be not apply if multiple claims are made against you in a specific time-frame. In the event that a claim is made against your insurance then you will lose a part of your no claims bonus. Protection your no claims bonus with either full or step back promotion will come at a cost. This kind of reduction can make a big difference. Yet in practice, insurers apply different approaches to discounts that are far from straightforward.

Most insurers cap the number of years for which it warrants a discount. For drivers aged over 25, the impact of an NCD is seen mainly in the early years. Jen Rose, 39, from Cenarth near Cardigan in west Wales, has built up her NCD over a number of years and clings to this to get cheaper premiums at renewal time for the Audi A6 she drives. I know from friends who have a much longer claim-free period, that the savings tend to tail off.

Yet motorists can be protective of their NCD and fearful of losing it even after many years. So is it ever worth paying to protect your NCD? As a driver with four or five years of claim-free driving behind you, you may be tempted to pay an extra fee to keep your history clean.

Remember, you are paying to protect the discount rather than the premium.