Car (No claims discount), insurance company con trick

sanfly

Quentin wrote: »

Not necessarily.

All you have is a history of 11 years without claiming, which is different to having "11 years no claims discount".

Point taken....:)

Aerial_Man

I had 7 years no claims. When I made a claim they said now I only have 3 years no claims.

How come I said

Because we only recognise 5 years they said, which after a claim leaves you with 3:rotfl:

Every insurer should be made to recognise however many years you have actually got. I believe that is the most fair way possible.

I dissagree with dunstonh completely. Having different clauses and different "limitations and exclusions" between different providers only causes confusion to consumers and helps insurance companies more with not paying out and also for clever marketing.

If every policy and "policy feature" (including optional add ons) had to meet an industry standard, that would make things much easier for the consumer to see the price difference in like for like quotes and would also help prevent consumers from choosing a policy that does not meet their needs. Very few consumers are actually savvy enough to decide when a policy meets their needs, and the majority of insurance sales staff are not allowed to advise on insurance (only to tell the facts) which most sales staff would rather brush aside to get a sale!

I think it's fairer for all consumers to be able to expect standardised policy features. It would enable them to easily build together an appropriate package, and easily see price differences. This would promote a wider selection for levels of cover, and better quality cover at that.

The current system allows insurance companies to duck and dive, squirm, wriggle and not pay out. Thats not fair at all! as most consumers are not lawyers, and can not be absolutely sure of the terms.

mattymoo

At the end of the day, insurance is a highly complex contract between customer and insurer. It promises to make payments if certain conditions are met.

Insurance brokers can and will sort the good from the bad and see through the marketing gloss added by many firms to what is really a deeply unsexy product.

The internet and phone sales opened up a new channel of sales for insurers to offer their products. Many jumped at this chance, thinking they were cutting out the middleman (broker) and making a saving. It is up to that consumer to check and ensure the policy meets their needs either at point of sale or during the cooling off period. That does entail reading the terms and conditions and I would suspect 95% never do this. That is not the insurers fault.

Standardisation of policies and premiums used to happen under the old tariff systems. These were done away with during the Thatcher years and the move towards letting the market dictate. The market forces bought in additional benefits like legal covers, courtesy cars, new for old on newer cars, protected NCD etc.

Standardisation is never going to happen - it would be a step backwards towards basic policies and price fixing.

sanfly

Even in Malaysia they have introduced a NCD database, obviously a forward thinking country....

Quote......A new service provided by Insurance Services Malaysia now also makes it possible for vehicle owners to now check their motor insurance and motor takaful NCD for free online.

Full article

www.motortrader.com.my/Cars/NewsHeader/News-in-2010/Local-News/Easy-way-to-find-out-your-insurance-NCD.aspx

Aerial_Man

mattymoo wrote: »

The internet and phone sales opened up a new channel of sales for insurers to offer their products. Many jumped at this chance, thinking they were cutting out the middleman (broker) and making a saving. It is up to that consumer to check and ensure the policy meets their needs either at point of sale or during the cooling off period. That does entail reading the terms and conditions and I would suspect 95% never do this. That is not the insurers fault.

Not the insurers fault no, but insurers are feeding from this culture left right and center. Giving sales staff unrealistic sales targets and threatening them with being fired if they do not achieve them. The result of this means that most people are now being sold poor quality insurance with poor aftersales service, especially with car insurance the policy is not much more than a piece of paper to drive legally.

If it doesn't do what it says on the tin, then it shouldn't be called insurance and they shouldn't be allowed to sell it. Lets cut through the BS Riddles.

The country would be far better off with all the financial services sales minions in a manufacturing job Rather than feeding off the backs of society :beer: Leave the rest to proper brokers and financial advisors.

dunstonh

As a financial advisor you probably have knowledge / access to this info, but i doubt that the normal layman would investigate the marketing / internal ploys of any insurance company they go to, especially for car insurance.

This applies to all products. Whether financial or otherwise. If you dont know the subject, don't research it and buy on a whim then it's your own fault if you get it wrong. If you dont know what you are buying then you go to a specialist shop and they will go through it with you. In case of car insurance, if you bypass the broker then you take on the responsibility of knowing what you are doing.

I dissagree with dunstonh completely. Having different clauses and different "limitations and exclusions" between different providers only causes confusion to consumers and helps insurance companies more with not paying out and also for clever marketing.

Well lets apply that principle to every retail product there is then. And why not make them all the same price as well then as that just confuses people as well

I think it's fairer for all consumers to be able to expect standardised policy features. It would enable them to easily build together an appropriate package, and easily see price differences. This would promote a wider selection for levels of cover, and better quality cover at that.

Why should they be built the same to fit a price comparison site. They should be built to cater for the different needs of different people and then priced accordingly. This is the problem with quote comparison sites where the focus is totally on price and not on quality of cover or options/features available.

You now have low knowledge consumers having access to quote portals that were largely built to cater for broker/advisers who would also have research data to allow fine tuning of options wanted. Typically the marketing of these quote sites is not about getting the best but about getting the cheapest. So, some of the insurers build products that shave off bits here and there to target the cheap price market. This is why you often see multiple products from the same insurer in the price lists. Effectively a budget, standard and comprehensive version of their offering.

vaio

Aerial_Man wrote: »

Not the insurers fault no, but insurers are feeding from this culture left right and center. Giving sales staff unrealistic sales targets and threatening them with being fired if they do not achieve them. The result of this means that most people are now being sold poor quality insurance with poor aftersales service, especially with car insurance the policy is not much more than a piece of paper to drive legally.

If it doesn't do what it says on the tin, then it shouldn't be called insurance and they shouldn't be allowed to sell it. Lets cut through the BS Riddles.

The country would be far better off with all the financial services sales minions in a manufacturing job Rather than feeding off the backs of society :beer: Leave the rest to proper brokers and financial advisors.

Pretty much how I’ve viewed it for the last 35 years, just another motoring tax

sanfly

dunstonh wrote: »

This applies to all products. Whether financial or otherwise. If you dont know the subject, don't research it and buy on a whim then it's your own fault if you get it wrong. If you dont know what you are buying then you go to a specialist shop and they will go through it with you. In case of car insurance, if you bypass the broker then you take on the responsibility of knowing what you are doing.

With the greatest will in the world i do not believe that any broker/finacial advisor would have said," Do not buy that car insurance as although you have 9 years NCD now when you renew, they will say you only have 6 years NCD.......

mattymoo

sanfly wrote: »

With the greatest will in the world i do not believe that any broker/finacial advisor would have said," Do not buy that car insurance as although you have 9 years NCD now when you renew, they will say you only have 6 years NCD.......

No but a broker would have explained how NCD works so you can make an informed decision. NCD is not the be all and end all that you seem to think it is.

Here is the normal NCD scale.

1 yr = 30%
2 yr = 40%
3 yr = 50%
4 yr = 60%
5 yr = 65%

Some firms then add on extra years like so.

6 yr = 68%
7 yr = 70%
8 yr = 73%
9 yr = 75%

Those extra 4 years are only recognised while you stay with that insurer.

Now, if that insurer want £2k per annum less 75% discount = £500 premium.

Another insurer might only want £1400 less 65% discount = £490.

The premium you see is very similar but the true base premium (before the discount is applied) was much less with the second firm and the NCD is easily portable from one company to another. To you though, you feel like you've lost 4 yrs NCD.

dunstonh

With the greatest will in the world i do not believe that any broker/finacial advisor would have said," Do not buy that car insurance as although you have 9 years NCD now when you renew, they will say you only have 6 years NCD.......

A financial adviser wouldnt as car insurance is not within remit but on products that we deal with then we have to consider a whole load of things that are not linked to price. For example on life assurance, you would consider bolt ons/addons, Guaranteed insurability options (i class that as very important), guaranteed premiums (not reviewable), ability to adjust etc, claims record etc. Now many people that DIY and buy from quote portals just go on price only.

Don't underestimate what a good broker would look at on car insurance. I am not talking your rubbish Swinton office but an old style local independent broker. They have become more specialist and quality focused and more or less left the price cheap-at-all-costs to the quote sites.