insurethebox explanation: How new drivers could protect themselves
There are those of you who are probably racking their brain to figure out what these acronyms stand for?
Are these medical conditions? Are they football teams? Are they a band?
No. Well not in this context, at least.
NCD is an acronym of No Claim Discount – a term used to illustrate how drivers can save money through careful driving.
PNCD is essentially the same concept, varying in one major aspect – protection. A Protected No Claim Discount is your goalie, saving you mindless expense (goals) from your metaphorical opposition. Just like a goalie, you may not need to use them, but they are there to get you out of sticky situations.
So we have provided you with an explanation of how to protect the NCD you have worked so hard to acquire.
What is a ‘No Claim Discount’ (NCD)?
An NCD is a discount applied for the number of consecutive completed years you have been insured without making a claim against your insurance; with an ability to potentially decrease your annual cost, as the ‘discount’ name would suggest.
Simply put, drivers who do not claim on their insurance demonstrate a lower likelihood of claiming on their insurance in the future – thus earning a discount.
What is a ‘Protected No Claim Discount’ (PNCD)?
Now that we have established what NCD means for you, it is essential to tell you about our PNCD.
Essentially, it too acts as the name would suggest, protecting your accumulated years without a claim, and the benefits that accompany it.
This is a relatively complex area, so if you are following thus far – bravo. We have provided two scenarios to show the differences between protecting your NCD and not protecting it:
Scenario 1: Jessica (Protected NCD)
Jessica has been driving with insurethebox ever since passing her driving test just over a year ago; she drives extremely safely and to this day has never made a claim on her policy. Upon renewal, Jessica is offered the chance to pay to protect her No Claim Discount, and chooses to take up this offer.
She continues to drive safely for the next few months, until one day she loses focus and hits a parked car on her way to University.
Regaining her focus, Jessica rings up insurethebox and makes a claim on her policy after exchanging details with the person whose car she had hit.
Usually*, Jessica would lose her NCD that she has acquired over the previous year; but with her protected No Claim Discount, she is safe in the knowledge that this is protected.
This allows her to retain the NCD she has worked so hard to earn.
All drivers make mistakes – Don’t get punished for a momentary lapse in judgment!
*The nature of losing your NCD depends on the policy you have as well as the conditions of the accident you’re making a claim for.
Scenario 2: Sarah (No protected NCD)
Sarah is an incredibly safe driver who has never made a claim; she too has been driving with insurethebox for one year and is offered a chance to protect her NCD upon renewal, but chooses to not take this up.
Sarah continues to drive safely for another year, and has almost gained 2 years of No Claim Discount, which would give her a discount of around 36% on her renewed policy.
But one day, after work, Sarah fails to spot a car while pulling out of the supermarket parking space, and is unfortunately hit by another driver.
She now has to make a claim against her policy, where the Claims agent informs her that she has lost her NCD as the accident was her fault.
This momentary lapse in judgement means that Sarah has not only gone back to zero NCD but also lost a saving of 36% on her renewal premium. While she may have saved money in the short term (by not protecting it), she may have lost money in the long-term.
What is the point of protecting my NCD?
In 2019, our customers received an average 28% saving on their policy after one year of no claims driving – this is at no cost, but rewarded because they drove safely and did not make a claim. With insurethebox, driving safely could also entitle you to a further discount upon renewal, alongside this NCD.
This is a great saving for young drivers, who often experience rather large car insurance quotes. But if you get into an accident, this saving will go back to 0%, and you will start again with 0 years of NCD.
Protecting your NCD may cost some money, but it saves you from this step back – although making more than 2 claims against your policy can strip your NCD altogether. That 28% is safely protected, and allows you to keep that 1 year of NCD, and build towards another year where the savings increase to 36% on average (after 2 years NCD). But please note that these are averages – meaning that you may receive more, or less for years of no claims accumulated.
Whilst most insurers allow drivers to protect their NCD only after 4 years, at insurethebox we allow this from 1 year to help young drivers combat the pressures of high car insurance costs, and benefit most from protecting an NCD they have worked so hard to receive – acting as a metaphorical safety net.
So, getting a PNCD will make the cost of my policy go down?
Protecting your No Claim Discount will mean that for the vast majority of scenarios, making a claim will not affect your number of years accumulated. But this does not mean your premium will necessarily go down, as a result. Protecting your NCD does not safeguard your premium – so your overall price may still rise.
Factors such as changing a car or moving to a more crime-ridden area may affect the overall pricing of your policy – so when it comes to renewal, you may not see much of a difference despite a year of no-claims, but it will be applied to your policy.
We are committed to helping you become a better driver. Learn more about what insurethebox can do for you, and why customers choose us.
Alternatively, if you are interested in taking out NCD protection on your policy, or want to find out how this could help you, please speak to us on Live Chat now.