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    • Pennine Lady
    • By Pennine Lady 13th Jun 18, 1:15 PM
    • 30Posts
    • 1Thanks
    Pennine Lady
    Direct Line - No Claims Discount Protection Scam.
    • #1
    • 13th Jun 18, 1:15 PM
    Direct Line - No Claims Discount Protection Scam. 13th Jun 18 at 1:15 PM
    Hi Guys,


    I'm just angy with a renewal situation I'm haveing with Direct Line and I just wanted to share my experience!

    I've just received my Fiat Punto Renewal Notice from Direct Line for £612... It gone up quite a bit from last year.

    I gave them a call yesterday to ask why there's been such a massive jump in premium? They said, in addition to Insurance Tax and inflation my premium has gone up mainly because I had a claim early this year (Malicious Damage Claim - £450).

    I response I said that at last renewal I paid £40 to protect my No Claims Discounts to which they replied "Well Madam, if you look where it said when you opted for the cover "You can protect your hard earned No Claim Discount, you will also see the statement "However your premium may still increase following a claim!"

    Okay, I said, what would my premium be this year if I hadn't protected my No Claim Discount last year? They said, it would still most likely be £612.

    So what have I paid £40 extra for last year? Absolutely NOTHING! I have 4 years No Claims Discount IN NAME ONLY which I've since found out is not even recognised by other insurers and the claim I had means that all the quotes I'm getting elsewhere are being based on only 2 years NCD.

    I find this most outrageous! How they can charge for something to which I am receiving no benefit - As far as I'm concerned this is just as bad as the Bank PPI scandal!
    I'm most upset over this!

    Last edited by Pennine Lady; 13-06-2018 at 1:15 PM. Reason: Typo
Page 2
    • jackieblack
    • By jackieblack 13th Jun 18, 5:40 PM
    • 8,173 Posts
    • 12,197 Thanks
    jackieblack
    Exactly, I get it. I've been trying to say I paid £40 last year to protect something that actually in real terms is indeed irrelevant.
    Originally posted by Pennine Lady
    If you still believe that, try getting some quotes with a claim declared and zero NCD
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    • kingstreet
    • By kingstreet 13th Jun 18, 5:45 PM
    • 34,255 Posts
    • 18,595 Thanks
    kingstreet
    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.
    Last edited by kingstreet; 13-06-2018 at 5:47 PM.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Pennine Lady
    • By Pennine Lady 13th Jun 18, 7:31 PM
    • 30 Posts
    • 1 Thanks
    Pennine Lady
    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.
    Originally posted by kingstreet



    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
    • By Quentin 13th Jun 18, 7:54 PM
    • 37,526 Posts
    • 21,736 Thanks
    Quentin
    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
    • By syscure 14th Jun 18, 12:09 PM
    • 3 Posts
    • 1 Thanks
    syscure
    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!
    Originally posted by Pennine Lady
    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
    • By Pennine Lady 14th Jun 18, 12:11 PM
    • 30 Posts
    • 1 Thanks
    Pennine Lady
    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!
    Last edited by Pennine Lady; 14-06-2018 at 12:15 PM. Reason: Formatting
    • Pennine Lady
    • By Pennine Lady 14th Jun 18, 12:40 PM
    • 30 Posts
    • 1 Thanks
    Pennine Lady
    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.
    Originally posted by syscure


    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!
    Last edited by Pennine Lady; 14-06-2018 at 12:41 PM. Reason: Formatting
    • jackieblack
    • By jackieblack 14th Jun 18, 1:02 PM
    • 8,173 Posts
    • 12,197 Thanks
    jackieblack
    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!
    Originally posted by Pennine Lady
    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
    Last edited by jackieblack; 15-06-2018 at 7:27 AM.
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    • Pennine Lady
    • By Pennine Lady 14th Jun 18, 1:07 PM
    • 30 Posts
    • 1 Thanks
    Pennine Lady
    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
    Originally posted by jackieblack

    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
    • By Pennine Lady 14th Jun 18, 1:27 PM
    • 30 Posts
    • 1 Thanks
    Pennine Lady
    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.
    Originally posted by kingstreet

    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
    • By Quentin 14th Jun 18, 1:42 PM
    • 37,526 Posts
    • 21,736 Thanks
    Quentin
    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!
    Last edited by Quentin; 14-06-2018 at 3:19 PM.
    • kingstreet
    • By kingstreet 14th Jun 18, 4:01 PM
    • 34,255 Posts
    • 18,595 Thanks
    kingstreet
    So the issue is nothing to do with NCD. It's to do with how much premiums increase after a claim.

    I'm sure all of us have every sympathy with those who get stung especially after a no fault claim.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • forgotmyname
    • By forgotmyname 14th Jun 18, 5:10 PM
    • 27,784 Posts
    • 11,272 Thanks
    forgotmyname
    You had a claim...

    Your a higher risk....

    You pay more...
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • keith1950
    • By keith1950 14th Jun 18, 8:06 PM
    • 2,520 Posts
    • 1,136 Thanks
    keith1950
    Kingstreet and Quentin.......she just doesn't understand plain English.....you couldn't have make your explanation any simpler.
    She seems to be suggesting that they are deliberately, unnecessarily loading the gross premium so they can get a required income whereas the gross premium is loaded because she is an increased risk..
    • eschaton
    • By eschaton 15th Jun 18, 5:39 PM
    • 1,819 Posts
    • 1,603 Thanks
    eschaton
    The OP is really hard work.

    No point in explaining it again as others have done, as the lights just aren't switching on it would appear. Not even a flicker
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