Another insurance NCB and Main driver question

tosyn

Could someone please confirm my understanding

who gets the NCB bonus certificate issued for a Policy (call it policy 1, taken on year 2011)?

- Policy holder or main driver?

My understanding is : it is Policy holder / Main driver.

Another follow on question I have is:

A claim on policy 1 is accepted liability and the driver was driver 2 was at fault who was a named driver in policy 1. The policy holder or main driver 1 loses his no claim bonus? Correct?

Now to complicate the matter given the above case in next year (2012)

Driver 2 already had 6 years no claims bonus on a policy X, where he was the policy holder and main driver from 2010 to 2011.
In 2012, driver 2 becomes the main driver and policy holder of policy 2. In policy 2 , he/she gets to keep the accrued NCB on policy X despite the fact that he/she had an accident. So, he declares the accident in the policy 2 that he was at fault but keeps his NCB in tact. If driver 2 drives a whole year without a claim or accident then his NCB gets never impacted despite the fact that he had a claim previous year that he was at fault?

And the poor driver 1 who was the policy holder of policy 1 and never had an accident in his life suffers the finacial impact caused by driver 2.
Net effect is Driver 1 loses his non-protected NCB reduced by 6 years while driver 2 continues to enjoy his/hers NCB!!

I find the above hard to digest !! How odd is that, who designed this crazy system, headless chickens... ?

rs65

Generally the policyholder earns the NCB.

If a claim is made on a policy then the NCB on that policy is affected.

If a poor policyholder doesn't want to be affected by a claim made by another driver, he/she shouldn't let that driver near his/her car.

tosyn

rs65 wrote: »

Generally the policyholder earns the NCB.

If a claim is made on a policy then the NCB on that policy is affected.

If a poor policyholder doesn't want to be affected by a claim made by another driver, he/she shouldn't let that driver near his/her car.

Hi RS65,
General advise is, adding a named driver reduces the overall premium - but now you see the risk and negative impact it carries!

Aretnap

tosyn wrote: »

I find the above hard to digest !! How odd is that, who designed this crazy system, headless chickens... ?

Nobody designed it. It came about pretty much by accident, which is why it doesn't always make sense.

Many years ago, in the days when you bought insurance from a bloke behind a desk in your local High Street rather than from a Meerkat or a doll dressed up as a naval officer, underwriters started to offer a discount to renewing customers, particularly the god customers who didn't make claims. It was a way of retaining your customers, and originally you only got it if you kept the same policy year after year.

But then, when they needed to drum up more business, some insurers would offer to match their rivals' NCDs - a bit like Sainsburys' offering to accept Tesco's discount vouchers. Which is why it stays with the policyholder - they're just matching the discount the policyholder would have got had he renewed with the same company. Soon everyone started doing it, and now people treat their NCB as if it's (a) a basic human right and (b) the most valuable thing they'll ever own. You can even get insurance for it. But at the end of the day it's neither of those things - it's just a marketing gimmick which got out of hand.

So it was never planned or supposed to make sense, but now it's so ingrained that any insurer which tried to scrap it and move to a more logical system would probably find that they lost all their business. And from an insurer's point of view, at least it rates on an aspect of your driving history which is easily verified. If someone claims that they haven't had any accidents in any car for 5 years, it can be hard to know whether they're telling the truth. but if they say they have 5 years NCD on at least one car, that's at least something which can easily be proved or disproved.

Smithers37

Aretnap wrote: »

Nobody designed it. It came about pretty much by accident, which is why it doesn't always make sense.

Many years ago, in the days when you bought insurance from a bloke behind a desk in your local High Street rather than from a Meerkat or a doll dressed up as a naval officer, underwriters started to offer a discount to renewing customers, particularly the god customers who didn't make claims. It was a way of retaining your customers, and originally you only got it if you kept the same policy year after year.

But then, when they needed to drum up more business, some insurers would offer to match their rivals' NCDs - a bit like Sainsburys' offering to accept Tesco's discount vouchers. Which is why it stays with the policyholder - they're just matching the discount the policyholder would have got had he renewed with the same company. Soon everyone started doing it, and now people treat their NCB as if it's (a) a basic human right and (b) the most valuable thing they'll ever own. You can even get insurance for it. But at the end of the day it's neither of those things - it's just a marketing gimmick which got out of hand.

So it was never planned or supposed to make sense, but now it's so ingrained that any insurer which tried to scrap it and move to a more logical system would probably find that they lost all their business. And from an insurer's point of view, at least it rates on an aspect of your driving history which is easily verified. If someone claims that they haven't had any accidents in any car for 5 years, it can be hard to know whether they're telling the truth. but if they say they have 5 years NCD on at least one car, that's at least something which can easily be proved or disproved.

Excellent post and 100% spot on.

I've heard people say / write things like "Don't insurance companies HAVE to provide me a NCD?". Well actually they don't, because a NCD (OR NCB) is as you say something that is made up but recognised across most insurers. This is also the reason why a 'NCD database' does not exist because it's not a uniform discount.

rs65

tosyn wrote: »

Hi RS65,
General advise is, adding a named driver reduces the overall premium - but now you see the risk and negative impact it carries!

Adding the named driver doesn't carry a risk. Allowing them to drive does.

System

tosyn wrote: »

Hi RS65,
General advise is, adding a named driver reduces the overall premium - but now you see the risk and negative impact it carries!

Adding a named driver doesn't mean the person has to drive the car.

hpuse

tosyn wrote: »

Could someone please confirm my understanding

who gets the NCB bonus certificate issued for a Policy (call it policy 1, taken on year 2011)?

- Policy holder or main driver?

My understanding is : it is Policy holder / Main driver.

Another follow on question I have is:

A claim on policy 1 is accepted liability and the driver was driver 2 was at fault who was a named driver in policy 1. The policy holder or main driver 1 loses his no claim bonus? Correct?

Now to complicate the matter given the above case in next year (2012)

Driver 2 already had 6 years no claims bonus on a policy X, where he was the policy holder and main driver from 2010 to 2011.
In 2012, driver 2 becomes the main driver and policy holder of policy 2. In policy 2 , he/she gets to keep the accrued NCB on policy X despite the fact that he/she had an accident. So, he declares the accident in the policy 2 that he was at fault but keeps his NCB in tact. If driver 2 drives a whole year without a claim or accident then his NCB gets never impacted despite the fact that he had a claim previous year that he was at fault?

And the poor driver 1 who was the policy holder of policy 1 and never had an accident in his life suffers the finacial impact caused by driver 2.
Net effect is Driver 1 loses his non-protected NCB reduced by 6 years while driver 2 continues to enjoy his/hers NCB!!

I find the above hard to digest !! How odd is that, who designed this crazy system, headless chickens... ?

Policy holder always gets issued with the no claim bonus, and some insures give the same to named drivers as well.... Policy holder is normally the person who pays. So treat NCB is simply as a financial reward for making no claims, nothing more nothing less.

However, it is very important to note that when a claim is made - it is by the driver or against a driver in a policy. This information is mandatory, even if the car involved is stationary and parked with no driver, it is the driver who parked or last drove the car is responsible for any incidents.

I understand your frustration, but there is nothing wrong with the system, this has been followed since years and ages any quote that you get from insurance companies and underwriters normally asks about the drivers circumstances (i.e accidents/claims by/for/against) thereby increases the premium.

In your case above,though driver 2 keeps his NCB intact, underwriters do take into account that he/she had accidents which may impact the final premium amount quoted without accidents/claims.

Hope that helps to clarify