Car Insurance No Claim Discount

neil00357

Hi,

Wasn't sure where to go with this but is it a scam ?

I am buying a new car and currently trying to sell my current car. I needed to insure my new car from the 12th April. I also needed to keep my current insurance policy running until I sell my existing vehicle.

I am insured through the AA who act as a broker. 

I was told by AA Customer Service that the existing police could continue to run until the vehicle was sold but my existing 14+ years no claim bonus would be transferred to a new policy. They put me through to new car insurance sales and i was happy with the quote but they said as it was a new quote they wouldn't transfer over 14+ years i was only entitled to 9+ years which is the limit on their system.

I pointed out that this would disadvantage me in following renewal years if i chose to insure through a different company as i was aware that other companies will ask for exact number of years and proof of previous no claims bonus. I was told that 9+ was the maximum required to get 34% discount which was the maximum discount you can get and whether i had 14+ or 9+ years no claims bonus didn't matter.

If that is the case why do insurance companies request details above 9+ years no claim bonus?

I will of course ask for proof of the 14+ years when i sell my current vehicle and cancel my existing policy but where do i stand if next year when i renew my car insurance the A will then only give me proof of 9+ years and my new insurance company will not give me the full no claims discount that i would have got with 14+ years no claims bonus.

This appears to be a case of the AA reducing the no claims ears to 9+ rather than increasing the tears to what they should show, to ensure that customers can't go elsewhere because they will not be able to prove more than 9+ years no claim bonus when in reality they may have many more years than that?

Am i right?

CliveOfIndia

This is very common.  9 years NCD is pretty much the maximum that the majority of insurers will recognise, though some will recognise more.  However, anything more than 9 years (actually, anything more than 5 years in the vast majority of cases) will make next to no difference to your premiums.

And do remember, NCD has no basis in law.  It's kind of become standard across all insurers, but actually it's little more than a marketing gimmick, for want of a better word.

If it really bothers you, you could cancel your policy and move to a different insurer who will recognise your 14 years - but realistically it won't make a blind bit of difference to your premiums.

DullGreyGuy

neil00357 said:

Hi,

Wasn't sure where to go with this but is it a scam ?

I am buying a new car and currently trying to sell my current car. I needed to insure my new car from the 12th April. I also needed to keep my current insurance policy running until I sell my existing vehicle.

I am insured through the AA who act as a broker. 

I was told by AA Customer Service that the existing police could continue to run until the vehicle was sold but my existing 14+ years no claim bonus would be transferred to a new policy. They put me through to new car insurance sales and i was happy with the quote but they said as it was a new quote they wouldn't transfer over 14+ years i was only entitled to 9+ years which is the limit on their system.

I pointed out that this would disadvantage me in following renewal years if i chose to insure through a different company as i was aware that other companies will ask for exact number of years and proof of previous no claims bonus. I was told that 9+ was the maximum required to get 34% discount which was the maximum discount you can get and whether i had 14+ or 9+ years no claims bonus didn't matter.

If that is the case why do insurance companies request details above 9+ years no claim bonus?

I will of course ask for proof of the 14+ years when i sell my current vehicle and cancel my existing policy but where do i stand if next year when i renew my car insurance the A will then only give me proof of 9+ years and my new insurance company will not give me the full no claims discount that i would have got with 14+ years no claims bonus.

This appears to be a case of the AA reducing the no claims ears to 9+ rather than increasing the tears to what they should show, to ensure that customers can't go elsewhere because they will not be able to prove more than 9+ years no claim bonus when in reality they may have many more years than that?

Am i right?

Historically 5 years was max NCD, then some insurers decided it would be a better marketing message to say that they recognised up to 9 years NCD however it was smoke and mirrors as the first one that did it used to give a lower percentage of NCD at 9 years than we used to give at 5 years and naturally it took you longer to get there. 

Many insurers have very old systems still running at the heart of their operations, whilst front ends have been updated and fancy new tools bolted on around the sides the core can still be a mainframe system where "NCD" field in the db is held as a single digit number. Updating that to be a two digit number, as silly as it may sound, would be an immense task as its not just recoding the DB but updating every single place where NCD is called so the new variable its called into is also a two digit field. 

If there are any insurers that offer any benefit for having more than 9 years then they will be very used to dealing with policyholders who cannot provide proof of their full entitlement just as those that first started doing 9 years had to be because our letters said "5 or more years". Generally this is done by piecing together multiple years of renewal notices, the oldest gives your starting position and each subsequent shows no claims so whilst they persist the 5/9 or more wording the new insurer can be comfortable they should add 1 to the number of years of the prior. 

Aretnap

NCD is a marketing gimmick, nothing more, nothing less. In the dim and distant past it was a form of loyalty bonus - a way of encouraging your customers, particularly the good ones who didn't make claims, to renew year after year. The idea was that you would only get it if you stayed with the same insurer year after year. 

Obviously that didn't last long. Insurers realised that if they wanted to attract new customers they would have to offer to match the NCDs that they were being offered by their existing insurers. A bit like Tesco might offer to accept Sainsbury's money off vouchers - not because they're under any moral or legal obligation to accept them, but just because they think it's a good way of poaching Sainsbury's customers. 

But as it's still ultimately a marketing gimmick each insurer operates it according to their own rules. If insurer A only operates it to a maximum of 9 years, and insurer B decides to start operating up to 15 years, insurer A isn't obliged to rejig it's entire IT system to fit in with insurer B's new rules. Any more than Sainsbury's has to redesign it's money off vouchers so they are more easily read by Tesco's tills - there's not much they can do to stop Tesco poaching their customers, but they don't have to go out of their way to make it easy for them.

As above if being able to prove 15 years of NCD is important to you then you need to keep renewal notes going back a few years that you can piece together as proof if need be - but for the majority of insurers it will make no difference beyond 9 years anyway.

neil00357

Hi Everyone,
Thank you for bringing me up to speed with how NCD works in the Insurance market. I did try the comparison sites and put in different no years NCD and it made next to no difference, varied £5 - £10. The info in the replies is very helpful as my knowledge was based on how things worked out for previously in the past going back many years where you had to prove NCD and then having a new insurer bump up my insurance because my previous insurer would only say i had the maximum NCD they would go to and not the actual number of years i had. It appears that things may have changed. Thank you for your help

tifo

Rarely do any insurers state more than 9 years NCD.

I should technically have 28 years NCD since 1997 but it's said 9 years for last 10 years, before that Prudential used to state the actual number of years.

Don't know about 34% discount but Churchill say max discount for 9 years is 19% as do LV.

DullGreyGuy

tifo said:

Rarely do any insurers state more than 9 years NCD.

I should technically have 28 years NCD since 1997 but it's said 9 years for last 10 years, before that Prudential used to state the actual number of years.

Don't know about 34% discount but Churchill say max discount for 9 years is 19% as do LV.

Surprised that the Pru used to say more, it was a white label of DLG and their system only held a single digit field for NCD.

Each insurer sets their own NCD rates, it used to be fairly universally 30%, 40%, 50%, 60% for years 1-4, year 5 varied bit between 65% or 70%. When people extended to 9 years it used to be 66%, 67%, 68%, 69% which ironically meant that our 70% at 5 years was better than the 69% at 9 years others used to offer but by then most had stopped talking about the percentage discounts and so the smoke and mirrors of advertising up to 9 years NCD somewhat worked. 

The overwhelming majority of people have 4+ years NCD, the smoke and mirrors of eSure and Privilege who'd only insure those with 4+ years, and so its always been a bit silly saying you are giving the best drivers 70% off when in reality its the majority of people getting those sorts of discounts so is it really a discount or the norm?

In more recent years the discounts have been slashed but also the underlying premiums so now many say their average NCD is a value in the teens but a few insurers stick to the old scales. 

At the end of the day what's important is the premium rather than if it's a low base premium with a small discount or a big base premium with a large discount... the two go hand in hand