Around thirty three per cent of drivers have protected no claims discount included in their car insurance policy.
You may well be paying around an extra 10 per cent on top of your normal car insurance premiums to protect your no claims discount that equates to an average of £70 per annum. The benefit of building up your no claims discount over several years is that it could reduce your premiums by as much as 90 per cent.
Typically, after one year without making a claim your premium could reduce by 30 per cent and by year two 40 per cent.
Graeme Trudgill from the British Insurance Brokers Association said that drivers receive a discount of about 60 per cent after five years.
However, such drivers are finding that if they have made a claim when their policy comes up for renewal their premium has increased substantially-sometimes doubling. Even those drivers who have not made a claim are seeing increases in the cost of their car insurance.
Insurance companies blame increases in premiums on increased claims in certain postcode locations, uninsured drivers being involved in accidents and claims for personal injury such as whiplash.
The Office of Fair Trading found that between the period 2009 to 2010 premiums rose by 12 per cent and by 9 per cent from January to September 2011.
Some drivers believe that by paying extra for the no claims discount protection that their premiums are protected when in fact it is the discount that is protected.
One of the factors that effect what all car drivers pay for there car insurance is the amount insurers have had to pay out to in claims. So, even if you have not made a claim your premium is likely to increase.
Hopefully that clarifies the situation but any comments would be welcomed i.e. do you feel this is a fair system?