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Your no claim discount may not be as protected as you think

Building up a no claim discount is the best way to reduce your car insurance premium. It is the reward for good driving. After 4 years of claim free driving, many insurers will give you the option to pay a small additional premium to protect it. But can you be rest assured that your valuable no claim discount will be protected no matter what? Unfortunately, the answer is often no.

According to research from esure car insurance¹ many drivers don’t understand that paying to protect their precious no claim discount comes with certain caveats and it isn’t as protected as they might think. In fact, 37 per cent of drivers are not aware that there is usually a set limit to the number of claims they can make on their policy before their discount protection is overridden, reducing their no claim discount dramatically. Insurers may allow no more than one ‘at fault’ claim in the first year and no more than two over three years, rather than unlimited claims.

But from Sunday 20 April, esure will be replacing its standard no claim discount protection with ‘protection for the life of your policy’ at no extra cost - giving drivers a discount regardless of any claims made throughout the life of their policy with the company²

Unavoidable incidents can affect any driver at any time - no matter what their driving ability - such as vandalism, animal damage, car park scrapes, falling masonry or trees, and so on. ‘Protection for life’ will give safe drivers peace of mind that an unfortunate incident on the road, as well as standard ‘fault’ accidents and thefts, will not cause them to exceed the limits of standard protection and so ‘step down’ the no claim discount scale.

Useful tips:

• Check the small print - If you currently protect your no claim discount, you should check the small print of your current policy to see how protected you would actually be if the unexpected did happen. Safe drivers who have earned their maximum no claim discount from driving claim free deserve to be fully protected.
• Consider protecting your no claim discount if you’re eligible - Although it only costs motorists a small additional premium to protect their no claim discount, 38 per cent of eligible drivers with over 4 years of claim free driving decide not to pay to protect it. These drivers are at risk of losing a proportion of the no claim discount that they’ve built up if they are unfortunate enough to incur an ‘at fault’ claim.
• Don’t fall into the ‘it won’t happen to me’ trap - A third (32 per cent) of drivers eligible to protect their valuable no claim discount cite the fact that they’ve never had an accident so don’t think it’s worth paying for, as a reason for not protecting it. But remember - many claims aren’t related to driver ability at all and can’t be avoided.

 

¹ ICM Research interviewed a random sample of 2006 adults aged 18+ by telephone between 20th and 24th March 2008. Interviews were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.co.uk.
² Subject to continuing eligibility and your policy remaining in force. This does not protect your premium from going up.