To Protect or not to Protect Your NCD?

Apr 09, 2013, 12:00 ET from

CHESTER, England, April 9, 2013 /PRNewswire/ --

  • Not protecting a car insurance no claims discount (NCD) could lead to premiums rising by 30 per cent in the event of a claim
  • Protecting a five year NCD will add just £23 on average to annual premiums
  • Costs will vary greatly between providers, warns MoneySupermarket

Drivers making a claim on their motor insurance policy, with an 'unprotected' no claims discount (NCD), could see the cost of their premiums increase by as much as 30 per cent if they make a claim, according to research by

The UK's number one comparison site analysed the cost benefit of protecting or not protecting a no claims discount. The research reveals if a motorist who had five years 'unprotected' NCD and made a claim, they would see premiums hiked from £322 to £417, an increase of £95, or 30 per cent. However, motorists with five years protected NCD making a claim would only see an eight per cent increase, or £28 - from £345 to £373 - to the cost of their annual premium. Furthermore, the average premium for motorists with zero years NCD stands at an expensive £700 a year.[1]

Peter Harrison, car insurance expert at MoneySupermarket, said: "Having reached the "Holy Grail" of five years no claims discount, many motorists will be reluctant to run the risk of losing it and may consider paying extra to protect it. Building up your no claims discount over a number of years can be a valuable commodity and can help reduce the cost of your premiums.

"With premiums on average rising by almost a third (30 per cent) if you make a claim, paying extra to protect your policy against this hike might be worthwhile. But be warned, if you protect your policy but don't make a claim for a number of years, you could find that you are eroding any potential savings."


Motorists looking to 'protect' a five year no claims discount (NCD) will pay an extra £23 on average on top of the cost of their annual car cover, however this can vary widely between providers ranging from around £4 to over £34.[1]

The longer a motorist protects their NCD and doesn't make a claim, the less cost-effective it becomes. In the first year, for example, a motorist who protects their five years NCD, and makes a claim, will be £21 better off on average, compared with a motorist who made a claim on an unprotected policy. However, the tipping point comes in the second year when a motorist would be £2 worse off. Looking forward into the third year, motorists protecting their NCD would be almost £25 worse off.[2]

Pete Harrison said: "If you are looking to protect your no claims discount, shop around for the best deal available for your circumstances and if you do find a better deal with another provider, you can take your no claims bonus with you.

"It's crucial for motorists to understand the costs involved with premiums; additional fees for protecting a no claims discount entirely depends on your personal circumstances and motoring history, as well as the provider. Furthermore, in the event of a claim, many insurers will take to a sliding scale when it comes to reducing your no claims discount. How much of this you will lose is down to your insurer so read through policy wordings first so you know where your no claims discount will stand. Finally, motorists should remember it is the discount they are paying to protect, not the premium amount- so if you do make a claim, it is likely premiums will rise as a result anyway."

Notes to Editors:

[1]Motor insurance premiums:

(Standard motor insurance scenario)

                         1          2           3          4         5
                                5 Yr NCD    5 Yr NCD
                     5 Yr NCD  (Protected) (Protected) 3 Yr NCD    Zero
        Provider     - 0 Claim  - 0 Claim   - 1 Claim  - 1 Claim Years NCD
    Endsleigh        GBP211.44  GBP215.54   GBP489.88  GBP242.55 GBP436.36
    esure            GBP214.66  GBP235.58   GBP247.50  GBP289.02    N/A
    Allianz          GBP215.35  GBP235.25   GBP259.54  GBP280.72 GBP479.02
    Sheilas' Wheels  GBP217.90  GBP242.69   GBP254.96  GBP297.72    N/A
    Octagon          GBP267.29  GBP288.15   GBP288.15  GBP358.06 GBP547.17
    Insure           GBP268.29  GBP279.36   GBP284.74  GBP389.91 GBP729.05
    Kwik-Fit         GBP269.97  GBP280.97   GBP296.97  GBP469.97 GBP703.97
    Swinton          GBP287.41  GBP299.01   GBP304.67  GBP448.58 GBP761.02
    LV=              GBP297.19  GBP326.52   GBP326.52  GBP342.34 GBP531.84
    The AA           GBP300.10  GBP311.80   GBP317.76  GBP542.41 GBP911.34
    Direct Choice    GBP316.28  GBP328.98   GBP335.19  GBP455.73 GBP801.67
    Nationwide BS    GBP325.41  GBP356.20   GBP356.20  GBP372.81 GBP571.80
    Hastings Direct  GBP326.46  GBP360.40   GBP401.11  GBP417.43 GBP813.86
    American Express GBP349.53  GBP364.28   GBP373.73  GBP512.54 GBP927.61
    Quoteline Direct GBP359.80  GBP373.18   GBP379.70  GBP469.65 GBP691.68
    Privilege        GBP380.54  GBP418.70   GBP418.70  GBP429.30 GBP616.92
    Post Office      GBP382.40  GBP408.65   GBP446.50  GBP443.48 GBP740.53
    Lloyds TSB       GBP383.04  GBP408.01   GBP447.10  GBP452.64 GBP732.37
    Halifax          GBP395.29  GBP424.22   GBP463.51  GBP464.84 GBP747.69
    Churchill        GBP401.74  GBP442.02   GBP442.02  GBP452.62 GBP617.98
    Budget           GBP407.92  GBP438.74   GBP479.17  GBP479.24 GBP802.12
    RAC              GBP410.16  GBP441.27   GBP482.41  GBP481.93 GBP768.54
    HSBC             GBP419.01  GBP449.88   GBP490.45  GBP489.48 GBP765.42
    Average          GBP322.05  GBP344.76   GBP373.33  GBP416.65 GBP699.90

Sourced by 04.04.13

     Extra if   Extra if    having
     protected  you were   protected
      but you      not     yourself
    crash (2 Vs protected and not (1
        3)      (1 Vs 4)     Vs 2)
     GBP274.34  GBP31.11    GBP4.10
     GBP11.92   GBP74.36   GBP20.92
     GBP24.29   GBP65.37   GBP19.90
     GBP12.27   GBP79.82   GBP24.79
      GBP0.00   GBP90.77   GBP20.86
      GBP5.38   GBP121.62  GBP11.07
     GBP16.00   GBP200.00  GBP11.00
      GBP5.66   GBP161.17  GBP11.60
      GBP0.00   GBP45.15   GBP29.33
      GBP5.96   GBP242.31  GBP11.70
      GBP6.21   GBP139.45  GBP12.70
      GBP0.00   GBP47.40   GBP30.79
     GBP40.71   GBP90.97   GBP33.94
      GBP9.45   GBP163.01  GBP14.75
      GBP6.52   GBP109.85  GBP13.38
      GBP0.00   GBP48.76   GBP38.16
     GBP37.85   GBP61.08   GBP26.25
     GBP39.09   GBP69.60   GBP24.97
     GBP39.29   GBP69.55   GBP28.93
      GBP0.00   GBP50.88   GBP40.28
     GBP40.43   GBP71.32   GBP30.82
     GBP41.14   GBP71.77   GBP31.11
     GBP40.57   GBP70.47   GBP30.87
     GBP28.57   GBP94.60   GBP22.71

[2]Motor insurance premiums - making a claim on protected vs. unprotected

(Standard motor insurance scenario)

  • £416.65 (unprotected premium) - £373.33 (protected premium) = £43.32 or £43
  • In the first year £43.32 - £22.71 (extra cost of protecting NCD) = £20.61 or £21 better off
  • In the second year: £20.61 - £22.71 = -£2.10 or £2 worse off
  • In the third year: -£2.10 - £22.71 = £24.81 or almost £25 worse off compares (at 22nd March 2013)

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