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

dacouch

If there was a major gap in the market for this type of thing we would be in undated with adverts for people with 3 years no claims bonus and a claim. We are not we are in undated with adverts for people with maximum no claims bonus.

Car Insurance in this country is argueably the most competitive in the world and we have lead the world in a number of inovations on its sale. It is a multi billion pound industry. The underwriters and acturies of insurers are far more informed on this subject than either of us so they obviously know better.

Let me know when the company you are working for starts advertising for clients with 3 years no claims bonus and one claim.

Rolandtheroadie

JonBoy_SCFC wrote: »

as an underwriter would you charge the following customers the same premium or different?

Customer A: NCB=5 claim in last year but NCB was protected
Customer B: NCB=3 claim in last year but NCB was not protected

I'd charge them the same. If you'd charge them a different premium i'd be interested to know why

thanks

No difference in TOTAL premium whatsoever OR risk in my book. However, customer A would pay less because he still has a full NCB which will be removed from the premium.
For me with my insurer, I would be 65% less as my NCB is protected. If i was customer B, my NCB would now be 1 year due to the claim(possibly around 30%).
So for every £100 of premium, customer B would be £35 worse off. Assuming you pay £200 insurance, thats £70. NCD protection doesnt cost that much.

dacouch

What he is saying is that they are both equally likely to make a claim in the next year so an insurer could set their prices to attract the person with the reduced no claim bonus and have a larger premium and thus make more money

Rolandtheroadie

dacouch wrote: »

What he is saying is that they are both equally likely to make a claim in the next year so an insurer could set their prices to attract the person with the reduced no claim bonus and have a larger premium and thus make more money

Lol, whatever happened to the "What is
the reason to have no-claim bonus protected if insurer will ask about claims?"

dacouch

He is sort of correct in some ways, they are both roughly the same chance of having a claim. He means an Insurer could undercut the other Insurers to gain all the people that have 3 years bonus and a claim. It is true they could but their premium would still be a lot more that the person with protected bonus.

If they then had a second claim the premium saving for the person with protected bonus would be massively cheaper.

I would still much rather have protected bonus and the peace of mind knowing my premium would be fairly stable if I had a claim than rely on that an Insurer "Might" offer a good price that even then would be a lot more than the person with protected no claims bonus. Like I said before if you have another claim the premium rockets.

Protected bonus means you can claim for that nice person who dented your car and drove off. Without its not normally worth claiming for a small dent costing £350

Rolandtheroadie

As has probably been mentioned before, why has someone 3 years NCB? It is because they are (probably?statistically?) not as experienced as the person with 5 years NCB (I say 5 but realistically, we're talking full NCB, mines is now 11 years)
I dont have pet insurance, i dont touch central heating insurance, I've only just took out life insurance (no critical illness tho), I dont have mortgage/income insurance I dont have 5 year guarantees on products in the home. I feel they are all unnecessary.
I protect my NCB. I KNOW it will save me money if i'm unfortunate enough to have a blame claim.

rudekid48

I don't think that this has been mentioned yet....

As others have stated, some Insurers will load for 1 claim and some won't. For me, the biggest advantage to protecting NCD is it allows you to leave the insurer that loads and go to the one that doesn't WITH FULL BONUS.

So, I really couldn't care less about the rights and wrongs of the underwriting, the fact is that protected bonus will save you money at renewal if you have had a claim - this may not be with your current Insurer, but so what?

dacouch

I agree totally with you rudekid48, thats another benefit of protected no claims bonus, I hope Jonboy is not talking his customers out of protected no claims bonus as I personally think he would be giving bad advice.

Rolandtheroadie

Excesses, now theres another thread.

rudekid48

scotsman4th wrote: »

Excesses, now theres another thread.

Oh no, I'm going to bed!

But before I do, I'll leave you with this little gem....

I recently witnessed a kid in a call centre trying to flog a bike policy with a £500 theft excess to another kid who had just bought a bike worth......£500 on a TPF&T policy. The hook for the sale? "If you need to make a theft claim, you won't lose your bonus 'cos it won't cost the Insurer anything"...... priceless.