Motor Insurance No Claims Discount

[redsturgeon]

I have the maximum NCD with my current insurer of 9 years = 80%.

However they quote me over £500 for this years renewal. This would suggest that without NCD they would quote me £2500!

If a do a comparison site check and enter no no claims discount I can get cover for £700.

Someone is not being straight here.

Edit...It gets stranger, when I went back to add in 10 years NCD on that quote, the minimum cost went up!

John

[bungeejumper]

I have the maximum NCD with my current insurer of 9 years = 80%.

I got that far, and then choked on my porridge. You've been with one insurer for nine years?

If I don't change my insurer every two or three years (at the most), I can expect to get stiffed at renewal time. Norwich Union (now Aviva) trebled my wife's premiunm one year, and her broker had the nerve to say that he'd looked around and their quote was "still competitive". Ten minutes on GoCompare (or whatever) sliced £500 off the bill.

Just sayin'.

[redsturgeon]

I have the maximum NCD with my current insurer of 9 years = 80%.

I got that far, and then choked on my porridge. You've been with one insurer for nine years?

If I don't change my insurer every two or three years (at the most), I can expect to get stiffed at renewal time. Norwich Union (now Aviva) trebled my wife's premiunm one year, and her broker had the nerve to say that he'd looked around and their quote was "still competitive". Ten minutes on GoCompare (or whatever) sliced £500 off the bill.

Just sayin'.

No, I have just transferred the NCD when I move insurers, although I have been with this one for three years since the renewals have been lower or equal to other offers.

BTW it is only £500+ because I have my 21 year old on the policy. Without her it would be about £200.

Aha I just spotted why you might think what you did...the 9 years refers to maximum NCD discount rather than length of time with insurer.

John

[bungeejumper]

BTW it is only £500+ because I have my 21 year old on the policy. Without her it would be about £200.

Okay, next question. Have any of your drivers been involved in any other accidents, regardless of fault and possibly non-existent damage?

A few years back, I got a furious letter from my insurers (take a bow, Lloyds), accusing me of failing to report an accident, and effectively suspending my NCB. I had had done no such thing, and had had no such accidents!

Upon reflection, the penny dropped. My wife, while driving her own car, had been on the periphery of a multi-car shunt at a roundabout - a learner driver had stamped on the brakes in the middle of a roundabout, and a couple of cars ahead of my wifw had got their bumpers bent. There was no damage whatsoever to my wife's car, because she was well back from the scene of the confrontation, but all parties had sensibly exchanged insurance details, and then she'd come home, "having done the right thing".

News of the accident had duly got back to the insurance industry's claims database, and then Lloyds had heard of it and had hammered me for "not reporting this accident" involving one of my named drivers. The bastards! Interestingly, my wife's own insurance company had taken absolutely no notice of the incident, since she hadn't damaged anybody and also hadn't been damaged. It was just my own insurers that had decided to cut up rough.

There was no way I could persuade Lloyds of the silliness of their action, and it took more than a year before the (six or seven) other insurers settled their mutual differences and I was "clean" again in the eyes of my own insurer!

Guilty until proven innocent. Car insurance companies simply aren't worth trusting.

BJ

[redsturgeon]

No, no accidents or convictions but my point is not the cost of insurance, just that the sums do not add up regarding the 80% NCD.

I have not tried but I bet if I applied for insurance from my current insurer using a different name but the same details as my own but without the 80% NCD then I would receive a quote of considerably less than £2500, in fact I would be surprised if it was anywhere over £1000.

So this raises the question for me, what is the 80% discount quoted from and is this anything other than a scam?

John

[swill453]

I guess the real question is what does the purported 80% discount apply to? I'd imagine not to:

- insurance premium tax
- legal protection
- NCD protection (ironically)
- breakdown cover, if included

and maybe more that I haven't thought of.

Scott.

[EssDeeAitch]

Well I had a no fault claim and the other parties insurers paid out without any delay or argument. I was assured by my insurers, Admiral, that my policy renewal and NCB would not be affected in amy way.

Lo and behold on renewal, a £400 increase which was nothing at all to do with the no fault claim so they said.

I got a number of quotes and signed up with LV who were £500 cheaper which is ironic as I switched from LV to Admiral due to a rediculous renewal quote.

Dont trust them, never, ever trust insurers

[Imbiber]

Dont trust them, never, ever trust insurers

Spot on

[Laughton]

redsturgeon - how long has your daughter been on your policy? Obviously not 9+ years so I wonder if this could be the cause of the inflated premium?

To me, at least, it's worth getting a quote from the same company as a "new" customer with exactly the same details as existing but with zero NCD. See what the premium is and then call the company to ask why your renewal is not 20% of the "new" quote (hope that makes some kind of sense).

[Howard]

No, no accidents or convictions but my point is not the cost of insurance, just that the sums do not add up regarding the 80% NCD.

I have not tried but I bet if I applied for insurance from my current insurer using a different name but the same details as my own but without the 80% NCD then I would receive a quote of considerably less than £2500, in fact I would be surprised if it was anywhere over £1000.

So this raises the question for me, what is the 80% discount quoted from and is this anything other than a scam?

John

I guess you have identified the reason for the higher insurance premium. Your insurer will rate the risk of each driver on your policy separately. I’m guessing your daughter doesn’t have a 9 year no claim discount! So that’s likely to be the reason for the increase. And the reason why you can’t reverse engineer the quote.

Everyone reading this thread will have an interest in the profitability of insurance companies, either in keeping their own premiums down or in the value of investments in these companies in their pensions. So we’d all expect insurers to be professional and competent in assessing the risk their customers present.

I imagine your insurer will be happy to apply your no-claim discount if you take your daughter off your policy. However they are astute enough to assess the much increased risk of a mature driver who owns more than one car who puts a young driver on the policy of one of their cars which they seldom (or never) drive themselves. In this case, their driving history and NCD becomes irrelevant. It’s the young driver who is the risk. If you have bought a car for your daughter, it may be worth investigating the cost of making her the owner of the car. Whilst the first year or two’s premiums will be high, if she is a safe driver, her own NCD will reduce the cost significantly after a year or two and she will get the benefits later.

It’s very easy to criticise insurance companies, but from some personal experience of their underwriting decisions, when one investigates all the issues around a customer’s complaint, the full story usually reveals that their decisions aren’t as daft as they seem at first.

regards

Howard

[redsturgeon]

I guess you have identified the reason for the higher insurance premium. Your insurer will rate the risk of each driver on your policy separately. I’m guessing your daughter doesn’t have a 9 year no claim discount! So that’s likely to be the reason for the increase. And the reason why you can’t reverse engineer the quote.

Everyone reading this thread will have an interest in the profitability of insurance companies, either in keeping their own premiums down or in the value of investments in these companies in their pensions. So we’d all expect insurers to be professional and competent in assessing the risk their customers present.

I imagine your insurer will be happy to apply your no-claim discount if you take your daughter off your policy. However they are astute enough to assess the much increased risk of a mature driver who owns more than one car who puts a young driver on the policy of one of their cars which they seldom (or never) drive themselves. In this case, their driving history and NCD becomes irrelevant. It’s the young driver who is the risk. If you have bought a car for your daughter, it may be worth investigating the cost of making her the owner of the car. Whilst the first year or two’s premiums will be high, if she is a safe driver, her own NCD will reduce the cost significantly after a year or two and she will get the benefits later.

It’s very easy to criticise insurance companies, but from some personal experience of their underwriting decisions, when one investigates all the issues around a customer’s complaint, the full story usually reveals that their decisions aren’t as daft as they seem at first.

regards

Howard

First things first. My car is my car, I drive it more than 95% of the time, I am well aware of "fronting" issues and would not try to do that as it is dishonest.

Interestingly I did once play around with quotes with my son's car insurance and me as the main driver and him as named was actually more expensive than him as main driver and me as named driver! Work that one out.

I know that my young daughter will attract a larger premium, I expect that, but let's take her out of the picture to make matters clearer.

My quote with just my wife and I with 80% no claims discount is £250. Without any NCD I'd expect it to be £1250 but it is more like £500. Doesn't seem right to me.

John

[sg31]

When I was an underwriter many years ago we gave an introductory discount of either 25% or 30% to drivers who were over a certain age and hadn't had a policy for 2 years. I've no idea if that is still the case but if so there is a possibility that the discount offered by some companies is greater now .

Certainly back then we stuck to our NCD scale which was 60% maximum after 4 clain free years. Other companies offered 65% after 5 years.

Looking at comparison site I think they make it up as they go along. I've had instances where the premium changed from morning to afternoon for exactly the same risk details. I discussed this with a friend at the time and he suggested that it may be related to business flow. A lot of business coming in the rates are eased up, not enough and rates are dropped.

In my day comparison sites hadn't been invented but neither had the internet.

[DrFfybes]

My quote with just my wife and I with 80% no claims discount is £250. Without any NCD I'd expect it to be £1250 but it is more like £500. Doesn't seem right to me.

John

The actual percentage of NCD for the same years varies massively.
For some of the cheaper insurance companies the discount can be quite low - Admiral Average discount for max NCD is 37%. Interestingly their average discount for 1 year NCD is only 2%.
https://www.admiral.com/magazine/guides ... onus-works

ISTR the AA give 30% after 1 year, however when I first got insurance I used the AA and got 20% as I had been a named driver on dad's insurance, or because I had motorcycle insurance, or because I was a new customer, or was over 25, or had a pulse (I'm pretty sure at least 4 of those qualified me for the discount). Consequently nobody ever pays 100%

I have found specialist and owners club or "Marque Specific" insurers offer very large NCDs for higher performance cars, however the starting point is so ludicrous they would need to be 80% to even get on the first couple of pages of the comparison sites.

Going back to your original post - you say that it is £500 with NCD therefore £2500 full premium. You then say on a comparison site it is £700, however i've always found my current insurer refuses to quote on comparison sites. If it is the same company then obviously they are doing a 60% or so "new customer" discount. What was the comparison site quote with the NCD, presumably £140?

Paul

[Mike88]

When I had my first collision in 40 years (logged as a no fault accident) I was informed my protected no claims bonus was to protect the bonus and not the premium. Obvious when you think about it but it explained why my premium rose sharply following the accident. On a separate issue, on several occasions I have threatened to move my insurance elsewhere but miraculously the provider conjours up a lower premium to beat the best quote by a couple of pounds.

[redsturgeon]

When I had my first collision in 40 years (logged as a no fault accident) I was informed my protected no claims bonus was to protect the bonus and not the premium. Obvious when you think about it but it explained why my premium rose sharply following the accident. On a separate issue, on several occasions I have threatened to move my insurance elsewhere but miraculously the provider conjours up a lower premium to beat the best quote by a couple of pounds.

Every time I have contacted my car insurer to complain about a high renewal charge they have refused to budge and I have left for a sometimes much cheaper quote.

John

[sg31]

When I had my first collision in 40 years (logged as a no fault accident) I was informed my protected no claims bonus was to protect the bonus and not the premium. Obvious when you think about it but it explained why my premium rose sharply following the accident. On a separate issue, on several occasions I have threatened to move my insurance elsewhere but miraculously the provider conjours up a lower premium to beat the best quote by a couple of pounds.

Back when I was an underwriter we set our rates according to actuarial statistics compiled by our in house actuarial department. The customer facing staff were given rating books and had no wriggle room, senior branch underwriters had a little but not much. If a customer complained about a renewal premium staff could offer a higher excess to give a discount or restrict driving which reduced the premium by up to 10%, that was about it.

These days it seems that marketing departments have more control than underwriters or maybe it's the accountants who are concerned with income rather than risk premiums. I accept that statistical analysis is much quicker now with computer based systems but the actual risk element doesn't change much on a daily or monthly basis never mind by the hour.

[redsturgeon]

When I had my first collision in 40 years (logged as a no fault accident) I was informed my protected no claims bonus was to protect the bonus and not the premium. Obvious when you think about it but it explained why my premium rose sharply following the accident. On a separate issue, on several occasions I have threatened to move my insurance elsewhere but miraculously the provider conjours up a lower premium to beat the best quote by a couple of pounds.

Back when I was an underwriter we set our rates according to actuarial statistics compiled by our in house actuarial department. The customer facing staff were given rating books and had no wriggle room, senior branch underwriters had a little but not much. If a customer complained about a renewal premium staff could offer a higher excess to give a discount or restrict driving which reduced the premium by up to 10%, that was about it.

These days it seems that marketing departments have more control than underwriters or maybe it's the accountants who are concerned with income rather than risk premiums. I accept that statistical analysis is much quicker now with computer based systems but the actual risk element doesn't change much on a daily or monthly basis never mind by the hour.

Clearly if it was just a case of actual underwriting risk then the average policy would not vary by a factor of 10 between companies.

John

[DrFfybes]

Clearly if it was just a case of actual underwriting risk then the average policy would not vary by a factor of 10 between companies.

John

A factor of 10 is high, but AIUI it is not just your risk that premiums are based on, but also their risk.

Insurance companies balance a portfolio of customers against likely outlay, and want a range of high and low risk customers to balance their investment portfolio. If they have 90% of their customers as 60+ year olds in a Honda Jazz then they will offer higher premiums for more of the same, whilst encourage 20 year olds in Clios.

Paul