No Claims Bonus

[l5foye]

I am maybe about to ask a silly question, I hope not.
If you do not have Protected No Claims Bonus and there is a claim, do you automatically lose all your No Claims Bonus?
I am thinking of a situation where a person has 20+ years of no claims. In other words, is protecting your no claims bonus
essential?

 

[Bobby Dazzler]

I am maybe about to ask a silly question, I hope not.
If you do not have Protected No Claims Bonus and there is a claim, do you automatically lose all your No Claims Bonus?
I am thinking of a situation where a person has 20+ years of no claims. In other words, is protecting your no claims bonus
essential?

My understanding is that in the event of a claim, if you have full No Claims Bonus (NCB) or No Claims Discount (NCD) then you will lose only a portion of it. The way this is handled will vary by insurer, but losing 2 years is typical.

Bear in mind though that you almost certainly won’t have 20+ years NCD. You may have been claim free for that long, however insurers cap the length of no claims driving that they recognise, typically 5 years but varies by insurer.

So in event of an at-fault claim, your NCD May reduce from 5 to 3 years. The percentage discount at 3 years will again vary by insurer. A no-fault claim should not affect NCD, but again it’s worth checking your specific policy.

Finally bear in mind that the premium would increase in the following year if NCD is reduced, but there’s a potential a double whammy if the insurer believes the risk is now higher, which would increase the undiscounted price too.

Insurers have different easy of treating all of these things, so to be sure you need to check your own own insurer.

 

[Marquisofraspberry]

Even if you do have protected bonus, after a claim the insurers will load the policy and the renewal will rise, they get you either way.

 

[Deleted member 37751]

My knowledge was NCB was capped at seven years @Bobby Dazzler.

 

[Deleted member 37751]

Even if you do have protected bonus, after a claim the insurers will load the policy and the renewal will rise, they get you either way.

I’ve always thought that “protected NCB” was always a bit of a scam to be honest, everyone I know that had an at fault accident and claimed were punished financially come renewal which makes the “protected” bit seem a bit spurious.

 

[l5foye]

Thank you for the replies. In my case I note the cost of protecting my No Claim Bonus is only £22 . It would appear paying this is worthwhile.
I take the point about insurers getting you either way.

 

[flowrider]

I’ve always thought that “protected NCB” was always a bit of a scam to be honest, everyone I know that had an at fault accident and claimed were punished financially come renewal which makes the “protected” bit seem a bit spurious.

No it isn't spurious. If you have protected NCB then you still get the same discount but on a higher base premium. Without protection you get a lower discount on the base premium

 

[Dryce]

No it isn't spurious. If you have protected NCB then you still get the same discount but on a higher base premium. Without protection you get a lower discount on the base premium

I go with the spurious theory.

How can NCB make sense if your quote incudes your accident history. NCB make no sense these days - it seems to only exist because it used to exist and the industry can't shake it off. Protected NCB seems to be an opportunistic invention to upsell insurance on your insurance. The rally bizarre bit is that some insurers will allow you to carry a protected NCB - so you paid your previous insurer for a service which is provided by your subsequent insurer whose only real benefit is breaking the loyalty (you effectively paid for) of staying with your previous insurer.

It's quite a game.

 

[Deleted member 150136]

Its a No Claims Discount NCD, not a No Claims Bonus NCB.

If you have a full NCD equalling 70% discount you get 70% off say £400= £120.
If you don't protect and loose 2 years NCD giving you 50%, your £400 policy is £200.

Your accident history is irrelevant to your discount.

Your renewal price 'may/probably' be less than the example of £400, say £300 if you hadn't had a Claim but its your discount that NCD protection protects.

 

[Alfie]

Another important thing to remember is that its a ‘no claim’ bonus not a ‘no blame’ bonus. So if you claim and recover all your costs and excess from the third party, via your insurance company, although the net cost to your company is zero you still lose your NCB!

 

[Rayny]

Another important thing to remember is that its a ‘no claim’ bonus not a ‘no blame’ bonus. So if you claim and recover all your costs and excess from the third party, via your insurance company, although the net cost to your company is zero you still lose your NCB!

Slightly incorrect - Your NCB may be reduced whilst the claim is open, but if your insurer does recover all of their outlay then your NCB should be re-instated.

 

[Alfie]

Slightly incorrect - Your NCB may be reduced whilst the claim is open, but if your insurer does recover all of their outlay then your NCB should be re-instated.

Thats not the policy of all insurers. The key word in your post is ‘should’ but alas not always the case.