No claims discount protection

A no claims discount (NCD), particularly one built up over five years or more, can give you significant cost reductions on your car insurance premium. But if you make a claim, some or even all of those years of bonus and savings evaporate, just like that. How many years you lose varies dramatically between insurers, so look out for this in your car insurance comparison. See our full guide on no claims discounts for more details.

No-claims discount protection is a car insurance add-on which enables you to make a certain number of claims within a set period without affecting your discount. Some providers will require you to have a minimum number of years’ worth of NCD in order to purchase protection.

Let’s say you have five years of no claims built up and you are in an accident and need to make a claim. Without NCD protection, when you come to renew your policy or take out a new one, you’ll find your discount is reduced to maybe four, three or even zero years of no claims discount, affecting your premium price.

Using the same example but with a protected no claims discount, you could make one or even two claims within a set period and, when you come to renew, still have five years of discount applying to your premium.

Each insurer will have their own conditions and limitations on how many claims you can make without affecting your NCD, so be sure to check this.

It depends on your circumstances and preferences. For instance, if you are a new or young driver who currently has zero years of no claims discount built up; it would be redundant to protect against it. You should also take into consideration external factors, such as how likely your car is to be damaged by circumstances out of your control, and whether you will unexpectedly need to make a claim.

No claims discount protection is an add-on, so you’ll be paying extra for that peace of mind. Therefore, you need to weigh up what the additional cost to your premium would be and whether it’s worth the price. With several years of no claims discount in the bank, you’ll know first-hand the savings you can make on your car insurance premium, so let this guide your decision.