Insurance no claims relationships

nottsphil

tr7phil said:

You can of course have a separate no claims discount on any number of vehicles.  An accident in one of the vehicles will only affect that vehicle's no claims discount but the accident will affect the price of the other vehicles' cover simply because the largest part of the insured risk is the driver and the driver has now had an accident.

That explains why an accident is relevant to the premiums of other vehicles. It doesn't explain why the lack of an accident isn't. 

Sandtree

nottsphil said:

tr7phil said:

You can of course have a separate no claims discount on any number of vehicles.  An accident in one of the vehicles will only affect that vehicle's no claims discount but the accident will affect the price of the other vehicles' cover simply because the largest part of the insured risk is the driver and the driver has now had an accident.

That explains why an accident is relevant to the premiums of other vehicles. It doesn't explain why the lack of an accident isn't. 

Both are... NCD is a 30-80% discount off the premium... the premium is generated by consideration of a number of factors such as if you have or have not had any claims in the last 3-5 years.

You can have protected NCD at 75% have a fault claim and next year your premiums go up despite the NCD staying at 75% as the NCD only "guarantees" the discount it doesnt guarantee that the number which the discount is applies to doesnt move adversely. 

Were_Doomed

nottsphil said:

tr7phil said:

You can of course have a separate no claims discount on any number of vehicles.  An accident in one of the vehicles will only affect that vehicle's no claims discount but the accident will affect the price of the other vehicles' cover simply because the largest part of the insured risk is the driver and the driver has now had an accident.

That explains why an accident is relevant to the premiums of other vehicles. It doesn't explain why the lack of an accident isn't. 

So what's your take on it? What's your advice to the OP? (You're quick to criticise other posters - but that's all you've done, you've not otherwise contributed anything to this thread).

@Alenka81: others have already covered it. It may not seem fair but that's just the way things are, and legally so. The chances of anything changing are slim-to-none.

Dr_Crypto

Insurance in the UK seems a bit of an anomoly. I understand from those who've lived in mainland Europe that in most countries a car is insured regardless of who drives it. None of this named driver business. 
No idea how prices compare to the UK though. 

Sandtree

Dr_Crypto said:

Insurance in the UK seems a bit of an anomoly. I understand from those who've lived in mainland Europe that in most countries a car is insured regardless of who drives it. None of this named driver business. 
No idea how prices compare to the UK though. 

How insurance works varies the world over...

In some countries there is no need for Third Party cover as this is paid out by a government agencies funded by taxes and so insurance is optional and only bought to cover fire, theft, and accidental damage to your own car.

In the USA it varies by state, in florida you only have to have $10,000 of insurance cover to drive your car legally and so cause moderate injury to someone the insurer pays out up to their limit and you have to find the rest out of your own pocket.

Cost of insurance tends to be based on the same principles of claims costs + operational costs + risk margin + profit margin + taxes but how much each of those components can be varies significantly... insurance that is capped at paying $10k is cheaper than insurance that has to pay multi-millions for the same incident.

Aretnap

Mickey666 said:

Alenka81 said:

Hi all
Hope someone has a bit of experience in this topic and can maybe advise...
I have a motorcycle, car and van insurance. When talking about no claims bonus, these don't seem to relate, i.e.my 13 years of no claims on the car doesn't apply to my motorcycle insurance, however they apply any claims on the car to calculate my premium. Now is this doesn't sit right with me and I feel ripped off. 
Any ideas anyone please?

It doesn’t sit right with me either, though I know this is how NCD works.
I’ve never heard any justification that seems fair and reasonable for this rule.  After all a CAR cannot accrue NCD, it is all down to the DRIVER, so who cares what vehicle the driver is driving (as long as they are insured for it, obviously).
Yet, while insurance companies disallow a driver-based NCD, they are quick to recognise driver-based accident claims, even in cases of no-fault accidents.  Of course, NCD can be protected but that costs extra as well.
So, I can wholeheartedly understand the OP feeling being ripped off, even though it’s standard industry practice.

NCD is a marketing gimmick. Nothing more, nothing less. If you want a "justification" for it, you're coming at it from the wrong angle. 

In the distant past it was a form of loyalty bonus, a way for insurers to encourage their customers (especially the good ones who didn't make claims) to stick with them year after year, and the intention was that you would only get it if you stayed loyal.

Well, of course that went the way of all loyalty bonuses. Insurers realised that if they wanted to attract customers from their rivals, they would have to offer to match their NCDs. A bit like Sainsbury's might offer to accept Tesco's money off vouchers - not because they're under any moral or legal obligation to accept them, but just because it's a good way to poach Tesco customers. 

Viewed from that angle most of the oddities make sense. If you're insuring a second car for the first time then you don't have an existing insurer offering you a loyalty discount for that car - so there's no incentive for any other insurer to offer you one either. And complaining that you can't use your discount on two policies at once is a bit like getting a £20 off your next shop voucher from Tesco, then complaining that you can't use it twice at two different supermarkets. 

In practice of course NCD has been rather uncomfortably crowbarred into insurers' general rating systems. I suppose it might be better if it was scrapped altogether, but it's too late. Too many people see their NCD as (a) a basic human right and (b) the most valuable thing they'll ever own (you can even get insurance for it!) so the first insurer to scrap it and move to an alternative system would immediately lose all their customers. But of course it's neither a human right not the most valuable thing you'll ever own - it's just a marketing gimmick that got out of hand. 

rs65

Sandtree said:

Both are... NCD is a 30-80% discount off the premium... the premium is generated by consideration of a number of factors such as if you have or have not had any claims in the last 3-5 years.

You can have protected NCD at 75% have a fault claim and next year your premiums go up despite the NCD staying at 75% as the NCD only "guarantees" the discount it doesnt guarantee that the number which the discount is applies to doesnt move adversely. 

The most recent paperwork I can find from DirectLine shows a table for their "Average NCD in 2016"
It ranges from 11% for 1 year to 38% for 9 years or more

rs65

Aretnap said:

In practice of course NCD has been rather uncomfortably crowbarred into insurers' general rating systems. I suppose it might be better if it was scrapped altogether, but it's too late. Too many people see their NCD as (a) a basic human right and (b) the most valuable thing they'll ever own (you can even get insurance for it!) so the first insurer to scrap it and move to an alternative system would immediately lose all their customers. But of course it's neither a human right not the most valuable thing you'll ever own - it's just a marketing gimmick that got out of hand. 

Perfectly said

Sandtree

rs65 said:

Sandtree said:

Both are... NCD is a 30-80% discount off the premium... the premium is generated by consideration of a number of factors such as if you have or have not had any claims in the last 3-5 years.

You can have protected NCD at 75% have a fault claim and next year your premiums go up despite the NCD staying at 75% as the NCD only "guarantees" the discount it doesnt guarantee that the number which the discount is applies to doesnt move adversely. 

The most recent paperwork I can find from DirectLine shows a table for their "Average NCD in 2016"
It ranges from 11% for 1 year to 38% for 9 years or more

DL's used to depend on multiple factors so not everyone got the same discount for 1 years NCD and if you came to them with 0 NCD but a clean slate and over 21 you got an additional introductory discount which was almost the same as one years. You'd never be able to get them to confirm what actual discount you had though beyond the year count.

A quick google however shows something interesting... MoneySupermarket's search results states:

The amount of discount earned increases with each year of claim-free driving. So after one year you might get 30%, with the percentage increasing each year until you get 70% NCD after five years. Most firms offer a maximum NCD of 70%, although some offer 75% or 80%.

But click through on the link and it states:
As a motorist, your no claims discount makes a massive difference to cost of your insurance premium. Many can end up slicing on average 24% off the price you first paid after five years of claims-free driving. Every insurance company has a different approach to the discounts they offer

I've not been involved in Motor pricing for many a year now but it would appear the discount given has been slashed but as rates haven't shot up it sounds like its just been a more sensible approach taken. I recall when eSure launched and Privilege relaunched in response both aiming at the 4 year plus NCD market that in practice that meant that over 80% of people qualified for quotes... it always seemed a little odd to have a product where generally 80% of customers get a 65%+ discount or brands where 100% of customers get a 65% plus discount

Mickey666

neilmcl said:

nottsphil said:

neilmcl said:

That's simply just the way it is and always been.

That comment neither explains it nor justifies it. 

It doesn't need to be justified, it's just the way things are and nothing is likely to change.

Of course nothing is likely to change with that sort of defeatist thinking, but how many times has consumer pressure resulted in a change to commercial practices.  Hasn’t MSE itself instigated many changes itself as a consumer champion?