Can I Add Protected No Claims During My Current Policy?

If you have a built up a high number of years of claims free driving, and want to protect your No Claims Bonus (sometimes referred to as No Claims Discount) so that you don’t lose it if you’re involved in an accident, then this has to be done at the point of taking the policy out, and cannot be done at any point mid-term during the policy – whether that’s one minute into the policy or six months down the line. This is standard practice across the insurance industry and is in place to prevent people from trying to protect their No Claims Bonus after having an accident/claim.

Before you take out a Motor Trade insurance policy (or any policy with No Claims Discount protection available), it is important to consider protecting your No Claims Bonus so that you don’t lose all or part of the discount when it’s time to renew your Motor Trade insurance policy.

How Does A No Claims Discount Work?

When someone has a No Claims Bonus with an insurance company, they will usually get a reduction or a discount on their annual premium. No Claims Discount is earned by going through a full year without making a claim. Each consecutive claim-free year is added to your total, and a discount is given when it comes to renewal. 

No Claims Discount protection comes into effect when you’ve had to make a claim on your policy, for example:

• For a Third Party Only policy, if you’ve been involved in accident that is deemed your fault.
• For Third Party, Fire & Theft, same as the above but also includes claims for fire damage or theft.
• For a Comprehensive policy, this includes all of the above.

If you were involved in an accident or need to make any claim, such as those above and you hadn’t protected your NCB, then you will lose all or part of your discount, with the number of years Bonus being reduced or stepped back. For example, if you have built up 5 years of claims free driving but have an accident without NCB protection, your Bonus could be reduced from 5 years to 3 years, to 2 years, or in some cases with some insurers, it could be reduced back to 0 again.

If you have No Claims Discount Protection included with your policy, but you have to make a claim for any reason (whether it’s your fault or not) you may still find your premium goes up as the base rate from the insurer is increased to take account of the fact you have made a claim. However, because you have protected your NCD, your premium will still be eligible for the same No Claims Discount as you were before you made the claim. So, for example, if you had 5 years’ NCB and were awarded a 50% discount by your insurer prior to having a claim, you would still be awarded a 50% discount after a claim if you’ve got Protected NCB – though the base rate provided by your insurer to start with may be higher to reflect the fact you did make a claim. The number of years Bonus and the relevant percentage discount offered can vary from insurer to insurer – this is just an example for illustrative purposes.   

In some circumstances, such as if you decide to go to a different insurer and try to transfer your No Claims Bonus, you may find they won’t on honour your No Claims Discount Protection – always check before deciding to move your policy. 

This is just a summary of what may or may not happen with Protected No Claims Bonus. For details of how your policy might be affected, or to discuss adding this cover on to your policy at renewal, call our team on 0800 221 8077.