No-Claims Discount Protection Clause
The no-claims discount protection clause prevents, for an additional premium, one at-fault claim per calendar year in motor liability or own-damage insurance from downgrading the policyholder's no-claims class.
- Clause type
- Extension
- Origin/Market
- DACH – statutory
- Favours
- Insured
- Negotiability
- Negotiable
Standard wordings
- Allianz Direct special condition "Rabattschutz" KRB257 (market example)
Purpose
Under the no-claims bonus system, the premium rises noticeably over several years following an at-fault claim, as the policy falls back into a less favourable no-claims class. The no-claims discount protection clause shields the policyholder from this, for an additional premium: if no more than one at-fault claim occurs within a calendar year, the existing no-claims classification is preserved in motor liability cover and, if also insured, in fully comprehensive own-damage cover.
Effect and limits
Protection generally applies only to the first claim per calendar year and per class of cover; a second or further claim in the same year triggers the downgrade that would otherwise apply, with the protected first claim disregarded in the calculation. Protection is also tied to the existing contract: on switching insurer, the protected classification is not carried over, so the new insurer rates the policy as if the protection had never existed.
Negotiation and practice
Since the surcharge varies considerably between providers and is often only offered from a certain no-claims class onward, it is worth comparing before purchase whether the additional premium over the expected contract term exceeds the avoided downgrade cost. For high-mileage drivers with high vehicle values and long-standing loyalty to the same insurer, the protection tends to be more economical than for policyholders likely to switch.