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Wed, 10/03/2021
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Should You Protect Your No Claims Discount?

There is often dispute as to whether it is worth protecting your no claims discount. Whether you should or shouldn’t depends on your personal situation, but in order to help you make a decision, we will share some of the reasons why the protection of your no claims discount is worth considering.

What Is No Claims Discount?

A no claims discount, as the name suggests, is a discount for drivers who make no claims on their insurance premium over a certain period of time. The aim of this is to provide a reduction in premium annually for each year that a motorist goes without claiming on their policy. This is to reward motorists who have had incident-free driving each year, as they are deemed safer drivers and are therefore cheaper to cover in the eyes of an insurer.

How Do You Get No Claims Discount?

No claims discount is usually earned for every claim-free year of motoring. For example, if you don't make a claim for three years, this means you will have three years of no claims discount applied to the basic cost of your car insurance.

A no claims discount generally only accrues to the main driver, so if you are a named driver on someone else’s policy, it is unlikely that you will be able to build up your own bonus.

You will usually begin to see discounts on your premium after a year, but you often have to wait a number of years to be able to protect the price of your premium.

If you are ever unsure of the details of your premium, it’s always best to check your policy documents or to contact your insurer.

What Is Protecting Your No Claims Discount?

There is often uncertainty surrounding whether you should choose to protect your discount. If you buy protection for your no claims discount, this will probably add an extra cost to your premium. But if you have an accident without this protection in place, dependent on the number of years no claims bonus you have, you may lose your discount - which could result in you having to pay more for your premium in the future. But, this choice is of course at the discretion of each driver.

Protecting your no claims discount allows you to have a certain amount of “at fault” claims within a year without it jeopardising your discount, and this can be worth the added cost for some drivers. However it should be noted that each insurance company has different rules regarding how many claims are allowed, so it’s best to get clarity on this if you want to protect your discount.

Another important factor to remember is that having protection for your discount will not necessarily stop the price of your premium from rising after a claim. This is because insurers use your claims history to calculate premiums, so a claim will show up even with your NCD protected.

Should You Protect Your No Claims Discount?

We have compiled some reasons why you may want to protect your no claims discount: 

  • Motorists who drive claim-free for a number of years can build up a discount on their car insurance, and that discount can translate into a considerable saving.
  • You would normally lose your no claims discount for being in an accident with an uninsured driver if you had to make a claim on your own insurance. However, by protecting your no claims discount, your discount stays intact despite an accident. But it is important to know that you will probably have a higher premium, as you are seen as a higher risk after an accident. 
  • You are able to take your discount with you if you choose to switch insurers.

Despite these reasons, ultimately, answering the question, “should I protect my no claims discount?” is something only you, as the concerned policyholder, can answer. 

The best advice we can give is to speak to your insurer and discuss how much extra you will be paying to protect your no claims discount. You may find that this is affordable and worth your while, but the choice is yours to make.

How Else Can You Reduce The Price Of Your Premium?

No claims discount is by no means the only way to show you are a safe driver and enjoy the benefits of reduced premiums.
There are different ways that you can bring your premium down, such as black box or telematics insurance, which enables your insurer to monitor how, when and where you drive and reward you with lower premiums if you are seen as less of a risk to insure. You can also bring the price of your premium down by paying your premium at once, rather than in monthly instalments, as you will not be paying interest as you would in instalments. Furthermore, if you are in the market for a new vehicle it is worth bearing in mind that opting for a car with a smaller engine is worth considering, as this may fall into a cheaper insurance group.
Insurers assess your overall risk profile to provide you with a premium. Some factors include your age, your annual mileage, the car you drive, where you park your car and your occupation. Therefore, in order to get the right premium for your requirements at the right price, the best advice we can give is to compare policies and discuss your requirements.
Cost is just one factor to consider when looking for your perfect cover, and you may find that other policy perks are worth factoring into your decision. 
By choosing Be Wiser, you will also enjoy £195 of free policy benefits - including RAC roadside assistance breakdown cover, misfuelling cover, gadget & bag cover and 24/7 claims assistance.
Start your search for the perfect policy with us!