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   HOME   >   ARTICLES   >   SHOULD I PROTECT MY EXISTING NO CLAIMS BONUS CAR INSURANCE POLICY
Should You Protect Your No Claims Bonus? Why Protect a No Claims Bonus? Benefits of Protecting No Claims Bonus

Should I Protect my No Claims Bonus?

A No Claims Bonus is a very valuable thing for the driver of a vehicle to have. When an individual passes their driving test for the first time insuring their first vehicle is likely to prove quite costly. The reason for this is that the driver is “unproven”. He or she may have successfully negotiated a road test that lasts no longer than sixty minutes, but how will that driver cope when out on the road alone, at the mercy of reckless and inconsiderate motorists and having to endure the stresses of everyday starting and stopping, parking and sitting in slow-moving traffic jams?

It is only when that motorist has been on the road for some time, that is for a period of years, without making a claim against their policy that the insurance company will begin to have more confidence in them. Insurance companies like drivers who do not make claims, for they are a source of regular income without accompanying risk. This is why they offer a No Claims Bonus, a “reward” that increases progressively the longer the motorist is active without making a claim. Sometimes a No Claims Bonus might amount to as much as 60-70% of the premium, if the policy holder has not claimed over several years.

So when an accident does occur the policy holder will understandably be reluctant to claim, as the loss of their No Claims Bonus will be substantial, not just on that one occasion but over subsequent years. The temptation will be to settle outside of the policy if at all possible.

Nevertheless sometimes the damage caused may be so significant that the policy holder is left with no choice but to claim from their insurance. By so doing their No Claims Bonus, accrued through years of careful driving, will be null and void.

One way of avoiding this scenario is to take out No Claims Protection. This is in effect a second insurance policy, which protects the driver against suffering the loss of the bonus earned on the first policy. It means that, by claiming on the second policy, the holder retains his or her substantial discount on the first.

Should I protect my No Claims Bonus?

Whilst it may seem to be an arrangement that is too good to be true, No Claims Protection does of course itself cost money, and the cost of this policy will inevitably detract from the saving made on your No Claims Bonus, and this of course is the essential point.

When asking “Should I protect my No Claims Bonus?” what really needs to be considered is the combined cost of your reduced car insurance premium and your No Claims Protection, and whether this represents a significant saving on what you would be paying for your car insurance if there was not a No Claims Bonus applied. Check car insurance quotes at websites like those listed above and see who offers the best premium for protecting your existing no claims bonus if you do indeed wish to protect your current no claims bonus you have accrued on your car insurance policy.

 
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