There are 'staggering inconsistencies' in the prices that different car insurance companies charge for a protected no claims bonus, new research from Confused.com has uncovered.
If drivers want to protect their no claims bonus – so that they will not lose it even if they make a claim – the amount they pay could vary from one car insurance provider to another, and they may not even benefit from the discounts often associated with the product if they fail to shop around, the comparison website said.
Whether or not to pay the extra premium to protect their valuable no claims bonus is weighing heavily with drivers who are trying to cut the cost of motoring to save money at the moment, as a no claims bonus has the potential to slash up to 75 per cent off the cost of car insurance.
But because car insurance companies differ when it comes to their underwriting procedures for calculating a premium, the value of protecting a no claims bonus is not always clear.
This is of particular concern considering that a protected no claims bonus does not always shelter a customer from having their risk reassessed in the event of an accident and seeing their premiums rise accordingly, regardless of the number of no claims years they have built up.
The cost of protecting a no claims bonus also varies from one company to another, the study found, and young drivers could spend an additional 33 per cent on premiums by protecting their no claims bonus.
The average cost of adding protected no claims to a policy for a 23 year old male is an additional 12 per cent of the premiums – an extra £105.
Will Thomas, head of car insurance at Confused.com, said of the research: "Whilst NCB can be a valuable asset when it comes to keeping car insurance costs down, it needs to be seriously considered if motorists are looking to cut costs. It appears that there is currently no consistency in the motor insurance industry when it comes to putting a price on guaranteeing a clear claims record.
"It is a mystery as to why some providers offer this extra for free and others want almost a third of the policy price for the privilege."
Mr Thomas added that whilst there is no consistency or transparency when it comes to justifying the cost of no claims bonus protection, "the only way consumers can make sure they are getting the best deal for this protection is to go online and compare each policy side by side."
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