Protected no claims discount

kervoas

My car insurer has increased my renewal premium by 280%. I have made one claim in the preceding year and have maximum protected no claims discount. The insurer refuses to disclose the discount applied to the renewal premium. This seems grossly unfair since I have paid for the discount protection. Surely I have the right to see details of what I'm paying for?

MorningcoffeeIV

The discount applied will be the NCD you currently have.

Details of what you are paying for are in your policy document.

Jenni_D

Just because you have protected NCB does not mean your premium won't be affected by a claim ... it just means your discount is unaffected. If the base premium before discount increases (as it almost certainly will after a claim) then the premium after discount will also increase, just by not as much.

Everyone's insurance is going up right now - you're not being uniquely victimised.

DullGreyGuy

kervoas said:

My car insurer has increased my renewal premium by 280%. I have made one claim in the preceding year and have maximum protected no claims discount. The insurer refuses to disclose the discount applied to the renewal premium. This seems grossly unfair since I have paid for the discount protection. Surely I have the right to see details of what I'm paying for?

You are protecting X years NCD... in the old days insurers were very open about what discount NCD represented and 99% were the same up to and including 4 years... its only when you went above that they diverged. 

People then started being innovative with NCD... like saying you get extra discount up to 9 years rather than maxing out at 5 years as used to be the norm the problem was that for those that were open about the discount in most cases it turned out the actual discount at 9 years was the same as the discount with other insurers at 5 years, it just took you longer to get there. 

It was after this that insurers tended to stop publishing what the discount is... some also felt its a bit silly saying the maximum NCD discount was 70% when over 90% of policies have maximum NCD.

Ultimately shop around, you'll see some still publish the discount in their policy books but most don't. Personally what matters is the price you are paying not the discount you are getting... I mean would you happily pay £1,000 knowing thats after a 90% discount or would you rather be paying £500 after an unknown percentage discount?

BillBarnet

I am having a similar problem with my John Lewis Insurance Buildings & Contents policy. There is a line item in the renewal document that quotes a figure for protecting my NCD (PNCD), but after a careful serach of the documents I discovered the actual percentage of the NCD discount being protected is not shown anywhere. I called John Lewis Insuranc last week and they confirmed that information is not available to customers, only the underwriters know it! My argument that you wouldn’t go into a shop, see a bag of potatoes priced at £5 with no weight indicated and, when asking for that info, be told “Sorry, I cannot give you that information,” was futile.

My reason for wanting know the percentage/actual amount involved is to establish whether it’s worth paying this additional premium, in other words would the saving on a future year’s premium if I made a claim be more than the amount I’m being asked to pay for PNCD, or could it in fact be less? I registered this as a formal complaint and I’m awaiting a response from Customer Services but this can take 8 weeks and I now only have 10 days before renewal to look for alternatives, past the 21 days Martin says is optimum for the best quotes. I decided to pre-empt any response by calling the Insurance Ombudsman to get a feel as to whether a judgement might go in my favour, and based on the information I gave the answer was that I would stand a good chance of a ruling in my favour, however that is of course only an indication.

How can a company get away with offering a product or service where they won’t tell you what you’re getting? The whole NCD situation appears oblique across a large part of the insurance industry - could this be the next PCI/car finance mis-selling scandal?

BarelySentientAI

I'm pretty sure the precedent has been set and accepted many times that companies do not need to disclose sensitive internal pricing information.  Just like they don't have to explain how the policy premium was calculated.  Seems odd that the Ombudsman is suggesting you will easily win a claim.

BillBarnet

I accept an insurance company isn't obliged to disclose how it calculates its premiums - that would be commercially sensitive information - but having established a premium, if it offers a no-claims discount on that premium, surely the percentage of that discount should be disclosed. Otherwise how does a customer who chooses to protect that discount know the value of what they are paying for? In this particular case the cost to protect my (unspecified) NCD accounts for more than 20% of the total premium, a significant amount where I think I'm entitled to ask the question (unlike say my car insurance where the cost of protected NCD is less than 0.05% and therefore relatively trivial).

BarelySentientAI

Disclosing to the public the pattern of discounts is still commercially sensitive.  It is information that would be useful to the insurer's competitors.  There's also no way of knowing whether the discount offered in the next policy year is the same as in this one.

Also, you're comparing the wrong thing anyway.  What you are asking to know is whether this year's extra cost is worth the value of the discount on next year's policy cost.  There is no possible way that the insurer or you can know what next year's policy cost will be, with or without any discount, so it is an entirely speculative calculation.  If the protection costs £50, then it would need to be a 10% discount on a £500 policy next year, but only a 1% discount on a £5000 policy next year.

Have you tried just getting a quote with X years' NCD and then with no NCD for otherwise the same details?  Not using specifically your own details of course, because that could raise unusual markers.  That would be more useful as it removes the speculation about what might happen to policy costs next year, plus you have no way of knowing whether the discount next year will be the same as it is now.

BillBarnet

Along the lines BarelySentientAI suggests, I asked the call handler at JL Insurance if they could remove the NCD element from the quote, which would have raised the renewal figure by £X and revealed the amount of the discount, but they were unable (unwilling?) to do that. In all other respects I'm happy with the policy so my inclination is not to pay the PNCD fee this year and if I do have to make a claim in the coming 12 months see how much the premium rises next year. It could be by less than the 21% I'm being asked to pay for NCD protection now, if it's more I can always go to the market for alternative quotes.