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Protected no claims bonuses - are they worth the paper they are written on?

If you are in the market for car insurance, you will no doubt have been offered some form of protected no claim bonus as well as endless other confusing and vague cover options, including variants of things you never even knew existed but apparently really need. Frankly, all this insurance business has become far too complicated and is far more arduous than it should be. Anyone would think this seemingly ceaseless stream of insurance companies were trying to bore us all into submission!

Whatever you end up going with, or indeed, not going with, the worst thing you can do is go into it with your eyes half shut. Tempting as it may be to sign any old form the insurance advisers throw at you and be done with it, this could land you in murky financial waters and leave you owing all kinds of unnecessary money for things you do not really need. You should at least have some idea of what you are purchasing and what you are getting yourself into beforehand. Being informed in advance will put you in a position where you can make legitimate and worthwhile enquiries as well as ensuring you know your rights. Best of all, it will prevent any advisers taking advantage of your lack of information and apparent naivete.

So, protected no claims bonuses. What exactly even are they? In short, protecting your no claims bonus (often referred to by the acronym NCB) is essentially insuring your insurance. In case you are unsure, a no claims bonus over time entitles drivers with a good track record to a large discount on their car insurance policy. If they don't make any insurance claims for a year, for example, they are rewarded with say five years of NCB, i.e. five years of driving claims-free. This discount can reach up 60-70% if the good record is maintained over a long time period.

However - and here is the rub - please don't think that if you have had an accident your protected NCB would mean that you wouldn't have to pay more for your cover next time, because you almost certainly will. This is because although the bonus remains the same, the premium that is based on would probably increase! You gain a bit but you still lose a bit, too.

Still, by paying to protect NCB, you basically get to keep it even if you have an accident. This may sound like pointless expenditure, especially if you consider yourself to be a safe and experienced driver, but surprisingly, it could just well be worth it, though arguably not quite as worth it as your insurance adviser will no doubt do their best to persuade you. Once you have had an accident, insurance companies will make you pay for an eternity - literally - by putting the price of your insurance premium right up. Protecting your NCB means that unless you have repeat accidents, you will still be able to save money, and over time this could add up to a considerable amount.

Of course, if you don't end up making any claims at all, you will ultimately be out of pocket, and you will essentially have paid for nothing but peace of mind for the period of time you protected your no claims bonus. However, even if this does turn out to be the case, it is a small price to pay for reassurance and security, and when it comes to the road, you can never be too careful, as even if you are the best driver in the world, it only takes one careless person to cause an accident.

Before deciding on anything, be sure to always read the small-print on any policy, as companies will always try and catch you out and certain policies may not be as great as they appear. In the case of protecting your NCB, look for how many times you can make a claim and under what conditions.

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