No Claims Discount: Is it Worth the Cost?

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Written by Michael Foote , founder of Quote Goat, with over 13 years experience working in the finance, insurance and currency sectors.

Picture this: you’ve spent ages building up your no claims, you haven’t put a foot wrong on the roads in years and you’ve managed to get your insurance premium right down as your driving has been exemplary. Then, one day, as you’re reversing into an empty space on a car park, in a rare moment of carelessness you fail to spot a parked car in your blind spot and to your dismay you accidentally clip the other vehicle.

Disaster? Well that all depends on whether you’ve protected your no-claims discount. If not, and the other driver makes an insurance claim then you’ll be back to square one having to get car insurance without a no claims bonus, meaning your premium could sky-rocket once it’s time to purchase your next insurance policy.

On the other hand, if you’ve had the foresight to plan for this scenario by protecting your no-claims discount, then you should be fine. But protecting your NCD comes at a cost, so is it worth it? That’ll depend on your circumstances, so to help you decide if it offers good value for money here are the main points to consider.

Will you be better off?

While protecting your no claims discount means you’ll continue to pay a lower premium even if you’re involved in an accident, you’ll need to pay an additional charge for the privilege. Not protecting your no claims can see your premium shoot up if you’re involved in an accident, so it can be tricky working out whether you’ll be better off by protecting your no claims or not.

According to research carried out by, not protecting your no claims discount could see your premiums rise by 37% if you make a claim. Protecting a no claims discount costs on average £33 per year, so the longer you pay for the additional cover the less valuable it becomes.

So, will you be better off by protecting? Well, that’s a difficult question to answer and ultimately, it’ll come down to your driving. If you’re someone who’s prone to accidents then you’d probably be best protecting your no claims. It is also worth noting that it is not just your driving that you have to think about, you could for example be involved in a hit and run on your parked vehicle.

How much can you save?

If you have 5 years or more no claims, then you’ll receive a significant discount on your insurance premium. Even 1 year will see you make some savings, but after 5 years this I where you’ll start seeing the cost of your insurance slashed heavily.

While protecting your no claims discount isn’t cheap, the cost will pale in comparison to the amount your premium will jump up by if you have an accident with 5 years or more no claims.

Should you protect your no claims discount?

Whether or not paying to protect your no claims represents value will depend on a number of things. Chief among them is your driving and how many years no claims you have, although you should also consider the terms and conditions of the insurance provider as some will differ to others. For example, some insurance providers require you to have at least 4 years no claims before they offer the bonus, while others will only allow a specific number of accidents within a time period before your protection becomes void.

When you compare car insurance, be sure to check the options for no claims discounts as most of the policies we compare come with NCD protection as an optional extra.

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