Car insurance premiums could rise 73% without protected no claims

Written by Editorial Team

03 February 2010 / by Rachael Stiles

Drivers who do not protect their no claims bonus could face increases in their car insurance premiums of as much as 73 per cent if they have to make a claim, research from moneysupermarket.com has revealed.

Paying an additional premium to protect their no claims bonus to prevent premiums rising as much if they make a claim – can save drivers a significant amount on their car insurance, the comparison website shows, but if a claim is never made it can seem like a waste of money.

Protecting a no claims bonus adds £62 to the average car insurance premium, the research found, and the longer the no claims discount is protected without a claim being made, the less valuable it seems.

This raises the question of whether or not it constitutes good value for money to pay extra in order to protect a no claims bonus, moneysupermarket.com suggests.

If a policy holder with five years of unprotected no claims discount makes a claim they could see their premiums rise from an average £528 to £911.

But, with a protected no claims discount of five years, the customer would only see a typical increase of 18 per cent in their car insurance premiums, from £590 to £694.

Steve Sweeney, head of car insurance at moneysupermarket.com, said: “Having reached the five year no claims discount level, many motorists will be reluctant to take the risk of losing it and may consider paying extra to protect it. With premiums on average rising by 73 per cent if you make a claim, paying extra to protect your policy against this sharp hike might be worthwhile.

But, he warned, “if you protect your policy but don’t make a claim for a number of years, you could find that you are eroding any potential savings.”

While protecting a five year no claims bonus will add £62 to the average car insurance premium, this figure varies considerably from one car insurance provider to another – from £8 to £90 – so Mr Sweeney urges drivers to compare car insurance deals.

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