NCD Caps are a scam !!!!!!

David_InsDef

InsideInsurance wrote: »

No, ceiling as in number of years not percentage.

Given you've given the percentage though, there is a fair number of providers, in the direct space at least, that give 70% discount for just 5 years NCD.

True, but as we know, the NCD years count and / or the % discount is irrelevant on its own; it's NCD combined with how the insurer rates all of the remaining factors and their starting base premium that drives the bottom line price. The top-line NCD % is used largely as a marketing tool as much as anything else nowadays. You hardly ever see TV ads boasting about 65% NCD, but insurers whose discounts max out at 65% still write plenty of business.

Re. the number, I've worked with rating tables quite recently where the discounts level off at 15 years.

InsideInsurance

David_InsDef wrote: »

The top-line NCD % is used largely as a marketing tool

Not just the percentage but also the number of years. When the direct/ bespoke policy brokers started moving up from 5 years there was a fair song and dance made about the fact they gave credit for up to 9 years -v- their competitors 5 years. Of cause they failed to mention that even at 9 years they gave less actual discount than some of those others did at 5.

David_InsDef

I honestly think the concept of earned NCD has got a limited remaining shelf life. There's a huge cottage industry around insurers issuing proof (and all the work / calls / cost attached to it) only for the next insurer or broker to need a whole load more resource to collect it. A staggering amount of claimed NCD is falsified (made much easier now that so much insurance is traded online).

I can see them opening up the MID to be used for validation at application stage in the way that CUE is for claims - that way you know exactly who has been insured where and when and also the claims they've made.

OnanTheBarbarian

Bottom line is that typically once you are at around 5 years NCD and protected, any further years beyond probably have little or no impact on bringing the premium down any further.

As said already, you could have a willy waving 90% NCD if you like and many suckers would fall for this, but the gross premium would probably be higher, thus resulting in probably the same net premium from one insurer who offers say 65% capped at 5 years + compared to one who offers a 90% reduction.

Bottom line, so long as the cover is good and the premium acceptable, happy days.

InsideInsurance

David_InsDef wrote: »

I can see them opening up the MID to be used for validation at application stage in the way that CUE is for claims - that way you know exactly who has been insured where and when and also the claims they've made.

No, a third party company is developing their own NCD database with a few big insurers having said they'll sign up to it.

MID have limited capabilities to help due to the fact one person can have multiple NCDs etc and its tied to the vehicle not the person unlike the NCD.

Unless a code to represent your NCD is created and all insurers subscribe then no system is going to help that much.

NCD has always been very easy to fake as long as you know different insurers practices and who does/ doesnt use CUE