MrEarl
I recommend you make a complaint to the Financial Ombudsman (after exhausting your complaint with the insurer).
In a similar situation, I did this, and won my case.
Unfortunately the compensation does not justify the amount of effort involved. The insurers have staff paid to deal with these complaints, so can spin out the process with endless obfuscation. But the more people that follow through on the process, the better the chance to get insurers to clean up their act.
Based on the decision from the Ombudsman, I would say that No Claims Bonus Protection is worthless. I won my case only because the insurer did not make clear how worthless it is in the terms. All the protection does is keep you at the same stage (in years) on their discount scale. However, they can change the discount rate. They can apply claims loading. They can trump up a new "minimum premium" (this is what they did to me). And of course, they will mark you as "zero years claim free", which is what other insurers will look at when you shop around.
In my opinion, NCD protection sale should be made illegal unless the insurer guarantees that a single claim will have zero impact on your record - the "years claim free" value should remain unchanged.
I'm happy to share the full Ombudsman decision by PM with anyone who thinks it will be helpful in fighting their case.
D