NLIC.org

Sylvia Said:

What does a 'protected no claims bonus' mean?

We Answered:

If you have a certain amount of no claims you can protect your no claims bonus. Every year, you are offered a discount if you do not claim and after 5 years this could be as much as 60%. However, one accident and you could lose this meaning that the next year you would pay 100%.

Some insurance companies offer you the chance to protect this. In other words it is an insurance on your insurance. What it normally means is that you will be allowed up to3 claims in 2 years without your no claims being affected.

Word of warning, you really do have to consider if it is worth it for you. The reason I say this is that although you have your no claims protected, you still have to declare if you have had an accident when you renew. This declaration by itself can raise your premium and if you have a large claim your premium might be raised drastically in anycase.

For example you have a no claims bonus of 50% and your premium is £200. That means you would pay £100. However, if you had an accident with protected no claims the following year your premium may be forced up to £400 because of the accident but you would still have your protected no claims bonus of 50%, meaning you would be paying £200.00.

I guess what I am trying to say is do not think just because you have protected no claims bonus, you wont end up paying substantially more if you have an accident.

I am not saying it is not worth it, it all depends on how much you will pay for it and if it is worth it for you.