What is the reason to have no-claim bonus protected if insurer will ask about claims?

dacouch

I do not know any company that has a large loading for a claim the more no claims discount you have. If anything it is often a smaller loading the more no claims discount you have as the Insurers look at it that the more ncd you have the better a driver you are so the less chance of a further claim.

We will have to disagree on this as I have been doing insurance for 20 years and in my opinion I'm correct. If the customer then has another claim and goes down to 1 years ncd the difference in the premium is even greater

Quote

Ignore JonBoy, he's a tit.

I wrote this a few weeks ago. It's what the Scotty fella said.

Firstly, the No Claims Discount (NCD) is YOURS. Think of it like a voucher you can re-use each year. Your insurance company will apply it to your policy if you ask them to and if they're willing to and if you want to use it somewhere else then you can.

I don't know what everyone else thinks, but I don't think there are any cons in protecting NCD.

Lots of different insurers have lots of different underwriting criteria. Some companies will load a policy if you make a claim, some won't. This loading applies whether or not the NCD is protected. If you protect your NCD and make a claim, and your insurer increases the price to an unacceptable level, you can check the market to see if you can obtain the same cover elsewhere for a more competitive price.

Although I would add that if you make a claim, and are happy with the claim service you receive, you shouldn't necessarily move from them on the strength of price alone.

NB Not all insurers will necessarily be prepared to protect your NCD any more after a fault (or sometimes even a non-fault) claim. Fault meaning the insurer has paid out without means of recovering their full outlay.

Taking the following NCD scale as an "average"

1 year = 30%
2 years = 40%
3 years = 50%
4 years = 60%
5 years = 65% (70% if you're over 50 years old)

Generally it will cost you more to protect 4 years (some can protect 4 years) than 5 years NCD because your premium is likely to increase more (mathematically) by losing 2 years from 4 as opposed to 2 from 5 (most - although not all - insurers operate a 2 year step back following a claim).

This is the crux of protecting NCD.

Don't imagine that your insurance will increase by "about 15%" if you lose 2 years NCD from 5 after a claim. That's not how maths works.

If you're paying £350 a year for car insurance net of a 65% NCD then the base rate for your insurance is £1000. If you make a claim then the same insurance (without any possible claim loadings) will cost at least £500 (£1000 - 50%), an increase of at least 42%. If you're over 50 the increase is at least two thirds.

Not only this, but it's going to take you at least two years to build the NCD back up to its previous level, so you'll be paying a higher premium for at least those two years (ignoring any general fluctuations in the insurance market).

You've worked hard to earn it, why not pay a bit more to secure it if you can?

It's worth (the) money.

JonBoy_SCFC

dacouch wrote: »

If anything it is often a smaller loading the more no claims discount you have as the Insurers look at it that the more ncd you have the better a driver you are so the less chance of a further claim.

i can't see how you are a better driver if the only reason you have higher NCD is cos you protected it? i.e. driver with 5 years NCD has an accident so drops to NCD=3. Are they a worse driver than same situation but NCD protected so NCD stayed at 5? surely the higher NCD doesn't make them a better driver in that situation?

agreed to disagree though! cheers for the debate:beer:

JonBoy_SCFC

Quote wrote: »

Ignore JonBoy, he's a tit.

totally unneccessary personal abuse, we were having what i considered a sensible debate. if you want to do that why not PM me?

Quote

I meant "he's at it". My finger slipped.

You are a tit though.

dacouch

I agree with you Quote and I think every one in the industy would, I accept that there is an arguement that if you are a "really great driver" etc etc then you could save the say £20 a year the protected no claims bonus costs you and in effect self insure your no claims bonus. However as I'm sure you are well aware through experience expect the unexpected and the "Really great drivers" have a run of bad luck and have two fault claims say hit by an uninsured driver and hit and run in car park and their premium goes from £300 to £800 because they never had protected no claims. (It happens more often than people expect) So for some people it can save a huge amount of money and can allow your average joe bloggs to put his claim in for a scrape in a car park with only having to pay his excess and possibly a small premium load.

Like I said before the customer is also buying peace of mind

Rolandtheroadie

JonBoy_SCFC wrote: »

i can't see how you are a better driver if the only reason you have higher NCD is cos you protected it? i.e. driver with 5 years NCD has an accident so drops to NCD=3. Are they a worse driver than same situation but NCD protected so NCD stayed at 5? surely the higher NCD doesn't make them a better driver in that situation?

agreed to disagree though! cheers for the debate:beer:

Agree with that statement. The only reason I protect is to save me money if I was unlucky enough to have a claim. Or 2 within a year even that would virtually wipe out my NCD.
It doesnt mean I'm a better driver and I believe my "flat rate" insurance quote would be higher than someone with no claims.

dacouch

This forum amuses me, QQQ asked a relatively straightforward question and we all have a mass in depth discussion that he is probably not interested in and will never read. I'm just glad when I did motor insurance we did not have such differing opinions as often happens on this website as we would never have got anything done although I must admit my old boss was always wrong!

rudekid48

Quote wrote: »

I meant "he's at it". My finger slipped.

You are a tit though.

Can't condone personal abuse but nearly wet myself with this one.

QQQ

dacouch wrote: »

This forum amuses me, QQQ asked a relatively straightforward question and we all have a mass in depth discussion that he is probably not interested in and will never read.

No, I have read it up to the end. Thanks for the discussion, it's very interesting for me. Go on if you like it