Your NCB is usually earned for each year of cover where a driver has insurance on a vehicle without making a claim on the policy. Each consecutive year without a claim builds up your NCB to a maximum of five years to attract a discount on the cost of your car insurance policy.
Building up your NCB can have a big effect on the price you pay for your car insurance premiums.
If you make a claim, regardless of whether you are found to be at fault or not, you will lose a proportion of your NCB, e.g. you damage your vehicle after skidding on black ice and raise a claim – the insurer has no other party to claim from, so you will lose a proportion of your NCB; or you are involved in an accident but the insurers cannot decide who is at fault, the cost then is split between the parties and you will lose a proportion of your NCB. The only case where you may not lose a proportion of your NCB is if you are involved in an accident where the other party claims full responsibility and their insurance provider covers all costs and expenses (including courtesy car, medical bills etc).
If you have an ongoing unsettled claim at the same time as your car insurance is due for renewal, you may be quoted a premium that is either higher or lower depending on the status of the claim, however, once the claim has been settled, your insurance will be requoted with the correct level of NCB and taking into account any convictions added to your licence. This may mean that you are entitled to a refund, or that you may have to make an additional payment to cover a shortfall.
It is possible to pay an extra fee to protect against the potential loss of your No Claims Bonus. However, if you have two accidents in a short space of time, it’s likely that your insurer won’t be keen to offer this option again. You should note that a protected NCB does not prevent your insurance premium from necessarily rising on renewal.
So, is protection still worth it? The short and sweet answer would be ‘yes’ because a NCB is a valuable asset and can provide a good discount on the cost of your car insurance.