Churchill, Direct Line, Privilege – do not pay to guarantee your no claims discount, it’s a con.

jimbo6977

Having worked, albeit briefly, for a large insurer, calculating premiums based on guide books, it was frankly a bit of a nonsense because the guide left huge amounts of leeway in any case, within which the underwriter could exercise "discretion". 

Finger in the air job. 

Then underwriters received performance related pay based on the accuracy of their quotes, but as the quotes were subject to vast swathes of discretion, in effect the bosses' favourites got tidy bonuses and the rest got a pittance. 

It was crazy. 

Gazzer

As the original poster of this thread I would like to clarify that I do understand the "rules" and worked in the insurance industry for a broker for several years although this was a number of years ago. Whilst it was always accepted an insurance company could load a premium even if someone had protected NCB it was not done where there was a single relatively low value claim and also contributory error on both sides. My objection is that they accepted additional premium to guarantee the bonus and then hiked the premium because a reduction of NCD was removed due to paying for extra insurance. If they automatically load premiums for everyone involved in an accident regardless of circumstance then it would be reasonable to do so it in this case. So if everyone says Churchill, Direct Line and Privilege automatically do this when someone is involved in any accident regardless of cost or responsibility then I would agree they treat everyone the same. 
I know insurance is about statistics and spreading the risk and we all pay for other peoples accidents when we pay our premiums. My stepdaughter is also aware of this, she has been doing it for a number of years as she has 9 years NCD so has been paying for other peoples accidents like the majority of us.

eddddy

Perhaps a good way of assessing the true value of paying for a protected no-claims discount...

Do 2 sets of dummy quotes using similar details to your step-daughter on a comparison site:

...1) Quote 1 - as though she had claimed but didn't have a protected NCD (i.e. the NCD reduced according to the terms of her policy)
...2) Quote 2 -  as though she had claimed but did have a protected NCD (i.e. still 9 years)

Hopefully, Quote 2 will be cheaper. That will demonstrate how much she is now saving as a result of paying extra for a protected NCD.

(At the same time, you can see how much extra it costs to protect the NCD - and do a cost / benefit analysis.)

Gazzer

eddddy said:

Perhaps a good way of assessing the true value of paying for a protected no-claims discount...

Do 2 sets of dummy quotes using similar details to your step-daughter on a comparison site:

........

The figures with 9 years NCD are of course less than with reduced NCD. My point is she paid for extra insurance (approx £20) to protect her from a loss of discount as a result of an accident. They are obliged not to reduce her NCD because of that but have increased her premium by adding an additional amount. because of the accident. If they always do that to anyone involved in a similar accident who does not have protected NCD i.e they treat everyone the same and increase someones premium as well as reducing their NCD  then that would be reasonable.
I doubt they do!  So why should anyone pay for extra insurance to protect their discount only to have Churchill penalise them in another way. If she did not have NCD protection then it is fully understood and accepted her discount would have been reduced.

chrisw

Gazzer said:

eddddy said:

Perhaps a good way of assessing the true value of paying for a protected no-claims discount...

Do 2 sets of dummy quotes using similar details to your step-daughter on a comparison site:

........

They are obliged not to reduce her NCD because of that but have increased her premium by adding an additional amount. because of the accident. If they always do that to anyone involved in a similar accident who does not have protected NCD i.e they treat everyone the same and increase someones premium as well as reducing their NCD  then that would be reasonable.
I doubt they do!  

Of course they do it to everyone who makes a claim!

So without protected NCD you would be facing a hike in the base premium and a loss of NCD. By protecting the NCD you are only getting the hike in base premium. 

dunstonh

My daughter had a direct line renewal come through last month and premium increased was was double the cost of alternatives.    So, don't assume DL is good this year (it came out top for her last year).

eddddy

Gazzer said:

The figures with 9 years NCD are of course less than with reduced NCD. My point is she paid for extra insurance (approx £20) to protect her from a loss of discount as a result of an accident. They are obliged not to reduce her NCD because of that but have increased her premium by adding an additional amount. because of the accident. If they always do that to anyone involved in a similar accident who does not have protected NCD i.e they treat everyone the same and increase someones premium as well as reducing their NCD  then that would be reasonable. 

I doubt they do!  

I know you "doubt they do".

That's why I suggested that you get some dummy online quotes - then you'll have a much better idea whether they do or don't.

cajef

dunstonh said:

My daughter had a direct line renewal come through last month and premium increased was was double the cost of alternatives.    So, don't assume DL is good this year (it came out top for her last year).

I have just renewed my DL car insurance last week, the premium increase was ten pounds, then when I asked to reduce my annual mileage by 3000 as it had been gradually decreasing over several years, it actually reduced my premium by twenty pounds.

Gazzer

eddddy said:

I doubt they do!  

I know you "doubt they do".

That's why I suggested that you get some dummy online quotes - then you'll have a much better idea whether they do or don't.

The reason I wrote "I doubt they do" is that I do not think they would increase everyone's premium if they were involved in this type of accident, it would not make them very competitive to reduce bonus (for someone who had not paid to guarantee it) and hike premiums as it would lose them too much business. That is why I think their decisions in this set of circumstances are unfair and unreasonable and as I was informed it is automatically done I wanted to highlight it.
I have already compared the price with them without the accident and it was about £70 less, sorry I did not make that clear. So it is questionable if she has "saved" anything by paying extra to guarantee her bonus and I know had she lost it then it would take 2/3 years to get back to a similar level of discount.
Obviously the policy will not be renewed with Churchill as there are more competitive alternatives out there and comparable to what she paid in previous years. The main purpose of this post is to strongly suggest people think again about paying Churchill, Direct Line and Privilege to guarantee their bonus unless they know that should they be unfortunate enough to be involved in an accident then their premiums will automatically hiked. 

Thrugelmir

Gazzer said:

My stepdaughter did and was involved in a minor accident where both parties were at fault 

Apparently they paid out nearly £1000 to the other party 

One party appears to be at fault. Otherwise there would have been no claim on your step daughters insurance.