No claim discount protection is designed to reward policyholders for not making any claims during a specified period. It allows policyholders to maintain their NCD level even if they make a claim. However, it's important to note that NCD protection usually applies to claims related to accidents, damages, or losses covered by the policy, and not specifically to vehicle theft.

In the event of a vehicle theft, the NCD protection may not directly apply since it is not considered a claim made by the policyholder. When a vehicle is stolen, it is typically treated as a comprehensive claim rather than a no-fault claim. Therefore, the NCD protection may not prevent the loss of NCD entitlement due to theft.

Its specific applicability and coverage can vary between insurance providers, so it's essential to review the terms and conditions of your policy to understand the extent of protection offered for different scenarios.