Cancelling a New Car Insurance Policy Before it starts

DullGreyGuy

born_again said:

DullGreyGuy said:

HillStreetBlues said:

DullGreyGuy said:

For Motor you would typically go to 3 years NCD following a fault claim if you are on 5+ years. On the old fashioned scale maximum NCD was 65% or 70% whereas 3 years is 50% and so still the majority of the discount applied. 

These days NCD is not as open and many use both more complex scales and lower percentages. Despite the fact that people brag about having 20 or 30 years NCD the vast majority of people have maximum NCD which makes it a bit of a farce to say you are getting 70% discount off the "normal premium"

Personally I think NCD are over overrated.
People worry about losing a NCB  but the real issue is the actual claim when you next go to insure, not the reduction of any NCB.

A 70% discount isn't anything to be sniffed at, NCD Protection used to be 15% charge so if your insurer did 70% NCD you were slightly better off than 3 years NCD. Ironically if you were with an insurer giving 65% max the by paying for NCDP it took it down to 50% which is basically the same as if you had made a claim and gone to 3 years anyway. 

As mentioned, these days are more complex and frequently lower discounts. 

Sure is not.

But if they load the policy before discount by 70% due to a claim, it a bit pointless.

There is no clear costings with insurance such as.
Base policy price.
Loading for claim.
NCD %

All you get is your quote is.

One for FCA to look at 🤣

But let's say the pre-claim premium was £1,000 and it goes to £1,500 due to the claim. If you had not NCD then thats what you'd be paying with an uplift of £500. If you had 70% NCD then you would have been paying £300 and now £450 so whilst it does still increase it's reduced to a £150 uplift. 

In the way you have laid it out the Claims History would be part of the base policy price, it's simply a rating factor along with your age, convictions, car, occupation etc. 

I doubt the FCA would ever ask insurers to publish their rating tables, for a start many people would struggle to understand them and its very hard to print 5 dimensional tables if you consider the relationship between multiple factors are more than just the sum of their parts... these days its possible to code the fact that a 18 YO with a modified hot hatch, 2 speeding convictions and 2 fault claims is a much greater risk than age alone would suggest if you had an otherwise identical 55 year old. Plus FCA has never required banks to publish how they decide which interest rate you get on a loan. 

Generally as long as the market is working well the FCA has said pricing isn't within their area of interest. Can imagine the red top's responses were things like price testing, propensity modelling, elasticity modelling etc were all exposed. The fact that 5% get a 10% discount would be ignored for the 5% that get a 10% loading for no other reason to test pricing. 

born_again

Not wanting rating labels or such, that are internal procedures/process. Which are sensitive info.

Just a simple this is how much we are charging for each part. As well as making discount % clear & transparent so people can work it out.

DullGreyGuy

born_again said:

Not wanting rating labels or such, that are internal procedures/process. Which are sensitive info.

Just a simple this is how much we are charging for each part. As well as making discount % clear & transparent so people can work it out.

What do you mean each part? As in the split between Accident Damage, Third Party, Fire, Theft etc? That wouldn't tell you what the loading was for having had a claim which is a rating factor in the same way age is.

Some companies remain open about the NCD discount and publish the percentages in their policy book. More provide indicative numbers (eg Admiral https://www.admiral.com/magazine/guides/car-insurance/how-the-no-claims-bonus-works) without giving definitive/personal numbers though naturally you could remove the NCD on a quote and see the price with or without. 

Again banking is no different though, logging into Barclays the other day they were saying I'm pre-approved for up to £50,000 at 6.9% which is less than the 8.0% that they list as the standard rate for such a loan. Is that a customer loyalty discount? For having a Premier account that they used to say would get you favourable rates on borrowing or something else? Unlike NCD I cannot see what it would be if I downgraded my account without actually doing so.