# protected policy



## RedUntilDead (Feb 10, 2009)

Due to renew so just wondered. Is protected no claims really worth the extra cost.
We tend to chop and change who we insure with every year and even swap the main policy holder over between me and the missus?
Whaddeyerfink?


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## Dixondmn (Oct 12, 2007)

With insurance you get what you pay for. 
If you want to save a bit of money this year by not protecting your NCD then you're quids in..... until youre involved in an accident, or some dolt vandalises your car.

I can't imagine it bumps the policy up by very much in terms of a percentage of the total premium.


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## hulla the hulla (May 20, 2009)

Lets not forget that protecting your NCD only secures the discount, it doesn't stop the base premium going up if have an accident or make a claim. Even then you can only make so many claims in a year before you lose it anyway.

A lot of folks think that protected NCD means no increase in insurance cost but at the point of renewal get a nasty shock.


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## Dixondmn (Oct 12, 2007)

hulla the hulla said:


> Lets not forget that protecting your NCD only secures the discount, it doesn't stop the base premium going up if have an accident or make a claim. Even then you can only make so many claims in a year before you lose it anyway.
> 
> A lot of folks think that protected NCD means no increase in insurance cost but at the point of renewal get a nasty shock.


It depends how long youve been driving. If you're up to an 80% discount and then one little bump or act of vandlaism out of your control and wipe out all those years of careful driving.


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## Shiny (Apr 23, 2007)

Here's an extract from a staff guide i wrote a many years back which may help explain all about NCB:

*No Claims Bonus (NCB)*

Each full year a policy is in force without any "fault" claims (a "fault" claim is a claim where the Insurers have made a payment and a full recovery has not been made) the Insurers allow a discount against the next year's premium (the "renewal" premium). Insurers will issue NCB proof confirming the number of year's entitlement and it is therefore transferable to a different Insurer if required. The discount varies from Insurer to Insurer but is generally as follows -

1yrs NCB - 30% discount
2yrs NCB - 40% discount
3yrs NCB - 50% discount
4yrs NCB - 60% discount
5+yrs NCB - 65% discount (can be protected at an extra cost)

A claim usually steps back NCB by 2 yrs (unless protected) and two claims in one policy year normally result in the loss of all NCB entitlement. Some insurers have a maximum NCB scale of 4 yrs NCB. When obtaining alternative quotes at renewal on "step-back" NCB following a claim, be wary of the step-back scale in place with each Insurer as they may not allow the number of years stated on the renewal notice, especially if the proposed new Insurer has a maximum NCB scale of 4 years.

*
PROTECTED NCB* - NCB entitlement can be protected when 5 years NCB has been earned (some Insurers will protect at 4 yrs NCB). The level of protection varies with Insurers but usually allows two "fault" claims in any five year period without the loss of No Claims Bonus. A third fault claim will usually follow the Insurer's normal step-back scale. Establish the level of protection offered by a policy and explain this to the customer. Be careful when replacing policies with Protected NCB where claims have occurred and establish with the proposed new Insurer what NCB and level of Protection they will provide. This can vary to full protection, limited protection (with a "loss of one life" for each claim) or some may only allow reduced NCB on their step-back scale. Also bear in mind that with some Insurers an additional excess applies on Protected NCB policies.

*
GUARANTEED NCB* - a limited number of Insurers offer Guaranteed NCB rather than Protected NCB, where by the level of no claims bonus is unaffected regardless of the amount of claims. However, the Insurers still reserve the right to impose claims experience loadings or even refuse renewal in the event of policies with poor claims experience. Again be careful when replacing policies with Guaranteed NCB where claims have occurred and establish with the proposed new Insurer what NCB and level of Protection they will provide.

*PASS PLUS* - some Insurers will allow a discount for first time drivers who have taken the voluntary driving course, Pass Plus. The Discount is not NCB, it is an "introductory discount" in recognition of the extra experience and therefore the reduced likelihood of a claim. They may allow up to a 35% discount at inception, this is not actual NCB but a discount "equivalent to" 1 yrs NCB. At the first year's renewal, provided no fault claims have occurred, the policyholder will have 1yr's earned NCB, but the insurers usually allow 40% discount (a discount equivalent to 2 yrs NCB although the actual NCB entitlement is only 1 yr). Again be careful when replacing policies at renewal, an 18 yr old can not possibly have earned 2yrs NCB!

*BONUS ACCELERATOR SCHEMES* - these are usually 6mnth or 10 month policies offered by Insurers for first time drivers. The price can look attractive, but when you divide the price by 6 (or 10 if a 10 month policy) and times by 12, more often than not on a comparable basis they work out more expensive than an annual 12 month policy. Again they will offer a discount equivalent to 1 yrs NCB at renewal after 6 (or 10) months but this is usually only available IF YOU RENEW WITH THE SAME INSURER and is not transferable, because it is not a full year's earned NCB.

The best example of this is a 17yr old who takes a 10 month policy on his 17 birthday. His policy falls due for renewal offering a 30% bonus accelerator discount. The insurers have had a bad year financially and have upped their rates substantially and are very expensive, even with the bonus accelerator discount. He's still 17 for a couple of months so he can't physically have 1 yrs earned NCB. Alternative quotes will have to be based on NIL NCB, wasting 10 months claim free driving.

It is also worth bearing in mind that if a 17 yr old takes out a 10 month Bonus Accelerator policy on his 17th birthday, when his renewal falls due, it will still be rated on his age of 17 with NIL NCB (but a 30% Bonus Accelerator discount). If an ANNUAL policy had been taken out on his 17th birthday, 12 months later the renewal will be based on age 18, benefiting from a lower age rating, and with 1 yrs EARNED NCB. You can also approach the market for alternative quotations with 1 yrs earned NCB that is transferable.

_Note on NCB _- NCB is earned PER VEHICLE and therefore if someone has two or more cars, they must earn a separate NCB for each car. This is easiest to explain when you look at the situation in reverse where if an accident occurs in one car, it doesn't affect the NCB (and therefore the premium discount) on the other car.


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## RedUntilDead (Feb 10, 2009)

Thanks.
Always paid for this but wondered what other peoples experience was as it has been many, many years since I made any sort of claim


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