Protected No Claims Bonus? Scam?

birkee

dacouch wrote: »

Sounds like Swiftcover or some other cheap and cheerful company

Just in case anyone doesn't know:-
Swiftcover (on-line insurers)
I insured with them one year, and with someone else the next.
Then I get a letter from Swiftcover saying they couldn't debit my account (changed cedit card) and unless I paid this years premium, the forces of evil would descend on me. (Bailif's etc)

They at no time sent me a new premium for this current year, so I had no idea what the premium was.
Nowhere did I read, that the premiums would be ongoing unless you cancelled. (Not even telling you what it was to be.)
What other company charges you motor insurance without being asked, and without telling you how much you have to pay?

I had to telephone them, and was told I must produce evidence of my current insurance, and they wouldn't charge me for the period between my old policy ending, and the new one starting. (Nice of 'em. Luckily it was same day year 1 to same day year 2, as required by law))

Do not deal with Swiftcover, you never know what they're likely to do.

motorguy

I think the word 'scam' is overused on this forum.

Everyone seems to be the victim of some 'scam' that invariably turns out to be down to their lack of understanding of how things work.

Marvel1

birkee wrote: »

Just in case anyone doesn't know:-
Swiftcover (on-line insurers)
I insured with them one year, and with someone else the next.
Then I get a letter from Swiftcover saying they couldn't debit my account (changed cedit card) and unless I paid this years premium, the forces of evil would descend on me. (Bailif's etc)

They at no time sent me a new premium for this current year, so I had no idea what the premium was.
Nowhere did I read, that the premiums would be ongoing unless you cancelled. (Not even telling you what it was to be.)
What other company charges you motor insurance without being asked, and without telling you how much you have to pay?

I had to telephone them, and was told I must produce evidence of my current insurance, and they wouldn't charge me for the period between my old policy ending, and the new one starting. (Nice of 'em. Luckily it was same day year 1 to same day year 2, as required by law))

Do not deal with Swiftcover, you never know what they're likely to do.

I was with them for 09/10 and it was 2 weeks to the insurance expired and no renewal letter, I phoned them and they posted it to me. I went with someone else as they were cheaper.

rev_henry

dacouch wrote: »

A lot of people buy it for peace of mind, it also allows you to claim for the smaller claims that you might not claim for if you did not have protected no claims eg someone damaging your car in a car park and driving off.

Protected No Claims really saves money if you are unfortunate enough to have a few claims in a shortish period.

For instance if your premium without no claims was say £1000 and you received 60% discount for maximum no claims and the insurer loads the premium by say 20% for each fault claim.

So one claim without pncb would mean a renewal of £600 (Assuming 50% for 3 years ncd). The same renewal with pncb would £480.

If you do the same calculation with two claims in say the space of 24 months the renewal with pncb would be £1008 but with pncb would be £576.

With three claims it would be £1728 without pncb but with pncb would be £691.

This is assuming the loads for claims stay at 20%, they are added concurrently and the insurer allows 2 pncb "lives" and then reverts to maximum. It is only an example of potential costings and could vary up or down depending on the insurer and / or their no claims bonus scale.

Another advantage of pncb, is insurers generally regard all claims as being fault until they have recovered their money from the other party. If you have a renewal in between it is normally on the premium with reduced no claims. You then have to recover the difference from the insurer / current insurer as and when they or you recover outlay and no claims is reinstated. With pncb the renewal would be invited on the premium with maximum no claims (Although they may take one of the pncb "lives" while the claim is being sorted)

So its basically a bit of a gamble as to whether it'll save you any money in the long run...

Now can anyone explain to me the difference between PROTECTED and GUARANTEED NCB?!
Also, are you all sure about most insurers not accepting each others protected NCBs? Surely if outgoing insurance company gives you a Proof of NCB saying 5 years, that's what incoming company gives you without question once they've seen the Proof?

dacouch

Protected has a limit, typically you are allowed 2 "fault" claims in a set period typically any 3 or 5 years (Depending on Insurer) a further claim in the set period normally reverts you to maximum un protected no claims.

Guaranteed no claims bonus (In theory) has no limits on how many fault claims you can have in any period. In reality if you developed a very bad claims record the Insurer could just underwrite your policy and apply a loading and / or excess to encourage you to take your business elsewhere.

True guaranteed no claims bonus is better than protected no claims

JQ.

I don't think it's a scam. I've just never seen the point in it myself - insuring your insurance. You could keep going if you want to - why not insure your protected No Claims, so that you're insuring the insurance that's insuring your insurance.

raskazz

Tucker wrote: »

Protected NCD has always been a waste of money

If you actually look at it scientifically instead of applying sweeping knee-jerk comments with no basis in fact, then you would see that protected NCD is worthwhile for all but people with abnormally low claim frequencies (less than one every ten years).

If you build a mathematical model which takes into account premium inflation, average claim loads, average cost of protected NCD and average increase in excesses that result from protected NCD you will see that it is far from a "waste of money".

Tucker wrote: »

and in practice rarely helps when you have claimed as other insurers normally will not honour it.

Absolute twaddle.

Wig

If you don't have protected NCD you only lose two years in the event of a claim anyway. I have never had protected for the last 18 years for this reason. Saved a packet.

2 years off the max NCB is probably going to bring the NCB down 10 - 15%. On my premium, that would represent about £30. After a premium hike, maybe £45. So it's well worth me not paying an extra £30 odd quid every year just to get protected NCB.

And everyone should look at it mathmatically like this.

raskazz

Wig wrote: »

And everyone should look at it mathmatically like this.

No, you should look at at mathematically with all the relevant variables, i.e. premium inflation, claims loads, excesses, load for adding protected NCD. Your analysis is too simplistic. It also ignores the 2nd year effects on premium as you are still earning back bonus.

A._Badger

Of course it's a scam. A scam is a ruse which encourages a customer to believe one thing when something else is true. Most consumers don't understand NCBs and the insurance companies know it. Most customers are not even capable of doing the maths - and the insurance companies know that too.

Just because something is covered in the small print, or can be explained to someone with a good grasp of maths, doesn't mean it isn't deliberately calculated to mislead the average punter.