Many people believe that if they pay for a protected no claims discount they will be able to have an accident or two without having to pay more for their next policy. This is incorrect.
There are two parts to the total sum that the motorist has to pay. The first part is the basic premium; the second is the no claims discount, which is then deducted from this sum. If a motorist with a protected NCD has to make a claim, that NCD stays the same; but the basic premium is likely to increase, perhaps substantially! To put this into figures:
- Let us say that the basic premium is £500, with a 20% NCD. The final premium is £500, less 20%, which equals £400.
- The motorist makes a claim.
- The basic premium rises to (say) £700, and the NCD stays at 20%. The final premium is £560.
The premium rise could, of course, vary a great deal, depending upon many factors. The only thing you could be fairly sure of, though, would be that the sum you would have to pay for your policy would increase, perhaps by a considerable sum. Plus your premium would stay higher, as a result of the accident, for several more years at least.
rather than pay the extra for a protected NCD, perhaps you'd have been better off paying the claim out of your own pocket and saying nothing to your insurer!