Direct Line - No Claims Discount Protection Scam.

kingstreet · 13 June 2018 at 5:45PM

It's this "£612 regardless" thing which is b*gg*ring things up. It doesn't ring true..?

Example - you have five years NCD and get a 60% discount. The gross premium is £1,000, so you pay £400.

You have a claim without NCD protection. Next year your gross premium increases to £1,500 and your NCD is cut by two years, to three years, or say 30%. Your net premium is therefore £1,050.

If you have NCD protection, your gross premium will still be £1,500 but your NCD remains at five years, 60%, so your net premium is £600.

NCD protection hasn't stopped the premium going up but by stopping your NCD going down has saved you £450.

Pennine_Lady · 13 June 2018 at 7:31PM

kingstreet wrote: »

It's this "£612 regardless" thing which is b*gg*ring things up. It doesn't ring true..?

Example - you have five years NCD and get a 60% discount. The gross premium is £1,000, so you pay £400.

You have a claim without NCD protection. Next year your gross premium increases to £1,500 and your NCD is cut by two years, to three years, or say 30%. Your net premium is therefore £1,050.

If you have NCD protection, your gross premium will still be £1,500 but your NCD remains at five years, 60%, so your net premium is £600.

NCD protection hasn't stopped the premium going up but by stopping your NCD going down has saved you £450.

They loaded the Gross Premium because of the claim so I'm still getting 60% discount but off a higher Gross Premium which they are entitled to do!

I've requested confirmation in writing!

Quentin · 13 June 2018 at 7:54PM

You've got it!!

They won't have told you pay "pay £40 to protect your premium"

You paid it to ensure your discount wasn't impacted by a claim.

So by your interpretation you waste £40 because you didn't make a claim that impacted your NCD (assuming your claim was for vandalism)

But that's always the same if you take that view over insurance premiums - always a waste unless you make a claim!

syscure · 14 June 2018 at 12:09PM

Pennine_Lady wrote: »

Brilliant - Wish I could have explained myself better in the same instance.

For the people who still don't get it. You pay to protect your discount NOT the gross premium.

If you have a claim which would have normally cost say a further £100 at next renewal the insurer still gets the extra premium by increasing the gross premium in such a way so when they deduct of your 'valued' protected discount they arrive at the figure they're wanting. So by paying to protect your discount you have achieved nothing!

I agree with Pennine_Lady & Clifford_Pope but think there is a bigger issue here which needs proper journalistic investigation. There were a few similar problems reported on the BBC’s Rip off Britain show this morning.

I get that when you pay for “NCD protection” you are protecting that %discount applied to a future insurance policy, however if you have NCB protection, come renewal you should expect to pay (or be quoted) only a reasonable increase for the new policy to reflect general industry wide costs (the cost of operating the business spread over their customer base). You should not have significant increases to your future quote as a result of the claim or notification of the accident to your current insurer.

As an example: If I were to have an accident (if I’m to blame or not) I would NOT expect a massive hike in my next policy renewal as a result, however if I then had a second, third… accident I would expect an increase due to my NCB being reduced and a risk assessment to determine likelihood of similar claims.

I also noticed that some companies are now advertising “protection of no claims discount” if your car is damaged while left in a car park & from accidents with “uninsured drivers”. From a consumer point of view that is what I have been paying for with comprehensive policies and NCB protection over many years.

It appears that the insurance industry has quietly changed the rules in recent years which of course will be buried in the many pages of legalese T&C’s we are all expected to read as we fill out the online forms. The companies are now finding more ways to penalise/exploit their customers unfairly in my view.

This smacks of the insurance industry having their cake and eating it, when you pay for the cover then pay for the protection of that cover and still get penalised when it comes to renewal time something is wrong.

It would be interesting to know what the ombudsman has to say about this?

Pennine_Lady · 14 June 2018 at 12:11PM

I'm not very good on getting my message across so I will end it here. Thanks for all the contributions.

I'll just finish off by quoting an extract taken directly from Compare The Market:

"NCD protection does not protect the overall price of your insurance policy. The price of your insurance policy may increase following an accident even if you were not at fault"

So many people are paying extra to protect a discount! So, whether they pay or not the price at the next renewal would be the same as the insurance Company increase the Gross Premium to get what they want!

Forget insurance for a second. Ill try and explain it another way:

If I offer you a service which normally costs £1000 but because of our connection over the years I offer you a discount of 50%.... so you pay me £500.

Then I say, If you call on me more than 5 times in the next 12 months I won't be able to offer 50% discount next year but if you give me £50 I'll guarantee/protect that discount.

You happily pay me the extra £50 and the year goes by.

Anyway, whatever the service is, through the year you call on me more than the agreed 5 times so I decide that I really need the full cost on this one to keep my services with you going.

So, at renewal time, I say to you, it's now £1000 for my services.

You say, but I paid you £50 to protect my discount to which I reply,

Indeed you did so, £2000 less 50% = £1000! Got ya!!!!

That is why paying the extra £50 last year could be described scam... the discount means nothing as I've amended the Gross figure to get what I want. Had you not paid me the extra £50 renewal would have been offered at £1000.

Are you happy now that you paid me £50 extra last year to protect your discount? Thought not!

In essence, the Compare The Market extract says it all.

Thanks again everybody... I'll leave it there!

Pennine_Lady · 14 June 2018 at 12:40PM

syscure wrote: »

It appears that the insurance industry has quietly changed the rules in recent years which of course will be buried in the many pages of legalese T&C!!!8217;s we are all expected to read as we fill out the online forms. The companies are now finding more ways to penalise/exploit their customers unfairly in my view.

This smacks of the insurance industry having their cake and eating it, when you pay for the cover then pay for the protection of that cover and still get penalised when it comes to renewal time something is wrong.

Brilliant reply well said!

On a different note, have you seen the latest Aviva advert where it says we won't ask you any awkward questions for Home Insurance? To demonstrate this they have a bloke who doesn't know what type of locks he has and whether they are British Standard?

All well and good for quotes and taking on the business but come a theft/burglary claim Aviva will no doubt pounce and say he had inadequate security. They will say, although the question wasn't asked it will be part of the T&C to have security at a certain standard.

This is fine but the advert clearly makes you think that the standard of security doesn't matter!

jackieblack · 14 June 2018 at 1:02PM

Pennine_Lady wrote: »

I'm not very good on getting my message across so I will end it here. Thanks for all the contributions.

I'll just finish off by quoting an extract taken directly from Compare The Market:

"NCD protection does not protect the overall price of your insurance policy. The price of your insurance policy may increase following an accident even if you were not at fault"

So many people are paying extra to protect a discount! So, whether they pay or not the price at the next renewal would be the same as the insurance Company increase the Gross Premium to get what they want!

Forget insurance for a second. Ill try and explain it another way:

If I offer you a service which normally costs £1000 but because of our connection over the years I offer you a discount of 50%.... so you pay me £500.

Then I say, If you call on me more than 5 times in the next 12 months I won't be able to offer 50% discount next year but if you give me £50 I'll guarantee/protect that discount.

You happily pay me the extra £50 and the year goes by.

Anyway, whatever the service is, through the year you call on me more than the agreed 5 times so I decide that I really need the full cost on this one to keep my services with you going.

So, at renewal time, I say to you, it's now £1000 for my services.

You say, but I paid you £50 to protect my discount to which I reply,

Indeed you did so, £2000 less 50% = £1000! Got ya!!!!

That is why paying the extra £50 last year could be described scam... the discount means nothing as I've amended the Gross figure to get what I want. Had you not paid me the extra £50 renewal would have been offered at £1000.

Are you happy now that you paid me £50 extra last year to protect your discount? Thought not!

In essence, the Compare The Market extract says it all.

Thanks again everybody... I'll leave it there!

No.
(I really thought you'd got it after kingstreet's post)

What has happened, to use your analogy, is that the £1000 cost of the services has increased after the first year, say to £1400.
You will still give your customer a 50% discount, but the price will rise to £700

Pennine_Lady · 14 June 2018 at 1:07PM

jackieblack wrote: »

No.
(I really thought you'd got it after kingstreet's post)

In your analogy the £1000 cost of the services has increased after the first year, say to £1400.
You will still give your customer a 50% discount, but the price will rise to £700

NO! I want £1000 so to get it I make the Gross amount £2000 and apply your 'protected' discount of 50% to get to it.

Pennine_Lady · 14 June 2018 at 1:27PM

kingstreet wrote: »

It's this "£612 regardless" thing which is b*gg*ring things up. It doesn't ring true..?

Example - you have five years NCD and get a 60% discount. The gross premium is £1,000, so you pay £400.

You have a claim without NCD protection. Next year your gross premium increases to £1,500 and your NCD is cut by two years, to three years, or say 30%. Your net premium is therefore £1,050.

If you have NCD protection, your gross premium will still be £1,500 but your NCD remains at five years, 60%, so your net premium is £600.

NCD protection hasn't stopped the premium going up but by stopping your NCD going down has saved you £450.

You fail to appreciate that there's nothing stopping (and they do!) them loading the Gross Premium. That's what they've done with me to arrive at the same figure!

Quentin · 14 June 2018 at 1:42PM

Your gross premium goes up following a claim irrespective of how much NCD you have to use!

So if you previously had 4 years unprotected NCD you will get s discount based on just 2 years at renewal

If you protected those 4 years then you get discount based on 4 years

Do dummy quotes online with a claim in your history and 2 years NCD followed by another quote with 4 years NCD to see the value of protection!

Direct Line - No Claims Discount Protection Scam.

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