Car Insurance Buyers Guide:
Protecting the no claims discount
In order to protect the no claims
discount on your car insurance
policy, you have to have a full no claims discount in the first place;
so this is only something to consider from year six (of no claims)
onwards.
According to Moneysupermarket, it costs, on average, £62 to
protect your no claims discount for the year. Premiums will rise by, on
average, 73% if you make a claim but this is only 18% if your no claims
discount is protected.
On average, in the first year of protecting the no claims discount, a
driver saves £155 if he claims compared to a driver without a
protected no claims discount. By year three he will only be £31
better off. By year 4, the cost of protecting the no claims discount
means that he would actually be £31 worse off.
Thus, the financial advantage of protecting your no claims discount
ceases in year four. Of course, unless you have a claim during years
six to eight, protecting your no claims discount confers no advantage
and is a recurring cost of around £62 per year.
Further, haivng reached year six without an accident for 5 years, your
changes of three further years of accident-free driving are reasonable.
To only save a small amount of money if you have an accident but to
lose out to the tune of around £62 per year if you don't, does
beg the question of whether not protecting your no claims bonus is a
good if not better choice.
Of course, road traffic accidents are relatively common and five years
of accident-free motoring is no guarantee that a claim will not be
needed in years six to eight when a protected no claims discount would
be the cheaper option.
Given the ever-increasing cost of car insurance, most drivers are not
looking for extra costs that confer minimal advantage. It would be fair
to put a protected no claims discount into that category.
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