How to protect your no claims discount

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One way of saving on the cost of your home insurance is to build up what’s known as a ‘no claims discount’ (NCD), which is also called a ‘no claims bonus’.

cost of Home Insurance

Insurers offer reduced premiums to those who don’t make claims with the intention of putting off policy holders from making smaller, less serious claims. The discount is offered both to existing customers as well as those buying insurance with a provider for the first time

The reduction in cost is based on how many years you may have gone without making a claim, and this can be carried over if you change insurers.

Considerable discounts on offer

The discounts can be considerable. Typically, for not having claimed during the first year of cover, you might get 20% to 30% off. Increasing reductions are then offered for each year you don’t claim, usually for up to four or five years. However, some insurers also take into account up to seven years no claims.

But what if you do want to claim? Whether that’s for a small or larger sum, the impact on your NCD will be the same; it won’t be as large in subsequent years until you’ve built it up again.

But is there any way you can claim without it having an impact on your NCD?

NCD protection ‘insurance’ is available

Some home insurers do offer you the chance to protect your NCD, in return for  a small increase in premiums.

However, it’s not as comprehensive as, for example, with the type of no claims discount cover that’s available with car cover.

Essentially, what you’re doing is insuring your NCD in the same way that you insure your home! The terms will depend on the insurer and type of policy you have, but usually, once it’s in place, you’re allowed to make one or two claims during the 12 months of your policy (or however long the policy is due to run) without this having an effect on any NCD you have built up.

Unfortunately, this is only generally offered to those who have built up at least 4 years of no claims, but a few insurers offer it to those with years.

…Or simply don’t make a claim

The only other way to protect your NCD is to not claim. Making your home more secure, being more careful with your possession when in your home or out and about (if you have away from home cover) and being diligent with home maintenance, and the servicing of boilers and white goods, all help to ensure your NCD will stay intact and get you the tasty discount the insurers offer.

Policy Expert 

We carefully select the insurers on our panel for their cover levels, price and claims service; to make sure you get the best possible quality for less. What you see is what you get – no hidden excesses or excessive fees. To speak to one of our experts, call 0203 014 9300 or email ask@policyexpert.co.uk

The views expressed here are solely those of the author and do not necessarily reflect the views of Policy Expert.