What is protected No Claim Discount?
Monday, January 22, 2018
 
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What is protected No Claim Discount?

It varys form insurer to insurer but generaly means that clients can protect their no claim discount for up two at fault claims in any 5-year period. This means that if your car is stolen, or you have no other party to claim against, you wont have to lose your no claim discount as well. Clients must have at least 4 years' no claims discount and be over 21 years old in order to be eligible.

Once you've had motor insurance for a year or more without making a claim, you should be eligible for a 'no claim discount' or 'no claim bonus.' This usually amounts to a reduction of 30% on your premium in the first year, rising in annual steps to a maximum of 60 or 65%.

If you make a claim, your no claim discount will be reduced or disallowed. If you have built up a higher rate of discount, most insurers will usually reduce it by two years, rather than disallowing it altogether, and some offer a protected no claim discount. Sometimes it may be cheaper to pay for minor damage yourself, rather than risk losing your bonus.

But what if the accident was not your fault? If you have protected or guaranteed your 'no claim bonus' this should be preserved following an incident, however if it is not protected it will be stepped back until the claim is resolved and a recovery made in full from the guilty third party. Your no claim discount shouldn't be affected if the insurer is able to recover the cost of the claim from the party who was to blame.

It's important that you inform your broker of all incidents of damage or loss, however small, and even if you do not make a claim for them. There have been cases where insurance companies have refused to meet claims because the driver failed to disclose previous incidents.

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