Firstly it varies from company to company. Some people run 4 years (30%, 40%, 50%, 60%). Some run 5 years where the fifth year is 65%. Some use different percentages, some promise 60% after 3 years, etc. etc.
People think it matters, it doesn't. If company A is prepared to offer you a discount of 10% on a gross premium of £100 it is a better deal then company B offering you a discount of 80% on a gross premium of £1000 - however, typically people will go for the 80% discount.
That to one side, the way that companies deal with transferring it from company to company is to ignore what percentages the other company was offering you and offer the discount that they would give for that number of years.
To take the average it is based upon 4 years claims free. For each claim you will typically lose 2 years bonus. Two claims will reduce you to zero%.
So your error is to think that the maximum is 9 years, it is not - usually 4, sometimes 5, rarely 6.
If you have protected NCD then you will have retained your NCD. However, this is largely meaningless since if you try to move to anotehr company they will apply their rules to your history, usually mening that you will lose your NCD. If you stay where you are, then they will usually increase your gross premium so that even though you still have this NCD, your net premium went up anyway.
It is becomingly increasingly foggy as different insurers but different spins on the whole process.
The clever people of this world, and in the insurance industry there are about 2, have worked out that its all irrelevant anyway. It matters not a jot what discounts/loadings/offers you get. It matters not a jot what it is called. It doesn't matter what the gross premium is, it doesn't matter what the discount is; it doesn't matter if you got a discount because you're a girl, a vicar, or a stripper. Nothing matters except one thing -
What premium will you actually PAY for the cover you want ? It doesn't matter what loadings, reductions, or colour they paint it. They will offer you a net premium reflective of their judgement of your risk profile and the attractive of your risk and its fit into their profile.
So prove your driving history because that will affect their rating and therfore the net premium you are offered - but who gives a stuff what "NCD" you have ? I don't and neither should you.
In your particular case it doesn't matter what p[ercentage of NCD they say you have. It matters on your claims and insurance history. For your history the majority of insurance companies will not offer a discount irrespective of what your insurer offers.
And by the way, insurers typicaly do not care whether or not it was at fault. They care who paid. IF you recover your uninsured losses then that claim will usually not count against you. If you did not recover your losses then typically it will. It is a no CLAIM bonus, not a no FAULT bonus.
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<< It is a no CLAIM bonus, not a noFAULT bonus.
No claims discount. A bonus is something that gets added to "income". A discount is something that gets deducted from "payment".
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"And here's your bonus; an additional discount !!"
[rasberry]
In fact both terms are used within the industry. And as it happens neither are correct since one can be at fault and not lose you bonus/discount meaning "no fault" is not accurate and one can make a claim without losing your bonus/discount making "no claim" equally as inaccurate.
More to the point, the term is no more relavent than the %age involved, only waht you actually pay matters.
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I caught the raspberry and delicious it was too!
NCD ... NCD ... NCD ...
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who gives a stuff what "NCD" you have ? I don't and neither should you.
I agree entirely that what matters is the price you actually pay, but isn't there one way in which NCD matters -- when you don't switch insurers at the end of the year.
If insurer X offers me a £200 premium with a 50% NCD (making £100) and insurer Y offers me a £135 premium with a 25% NCD (making about £105), then it seems to me that I'm better taking the latter because a) insurer Y's net price is more likely to fall next year, and b) if I have an accident with insurer Y, I have less to lose.
Maybe that doesn't apply if you change insurer every year, but not everyone wants to shop around annually for a new quote.
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>>if I have an accident with insurer Y, I have less to lose.
So got to insurer y *if* you have an accident, not in case.
NCD doesn't matter in the scenario you give. Only the net amount does. The way that insurers manage NCD is more to do with marketing than underwriting. You should never assume that an insurer's net premiums are more or less likely to rise or fall. Insurers are constantly tuning their rates, and the interaction of various restrictions, loadings and discounts to rebalance their profile. And their profile requirements change as business strategy and claims experience evolve.
Although you do raise an important point. If you are likely to make a substantial and material change duing an insurance year - add a young driver, change to a more powerful, mroe valuable car, change use, whatever - then ask for two quotes from an insurer, one to represent now and one to represent post those changes. otherwise you run the risk of being thrilled with the premium for your Mini but need a mortgage for the Ferrari you were about to buy.
>>but not everyone wants to shop around annually for a new quote.
Then don't. But understand and accept that you may well be paying for that luxury.
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"but not everyone wants to shop around annually for a new quote."
I do: every year. Spend 2 hours on the internet.
I reckon that insurance companies do their best to entice you to join them year 1 and then screw you for every penny year 2/3 etc. Facts (i.e their quotes) bear that out.
So I change insurers very 2-3 years . and expect to continue to do so. Not only for cars but house and contents as well.
This year I saved over £200 by switching. Well worth the effort.
Insurance companies run their business with inverted logic to any sensible business. They screw their existing customers and spned money to replace them. Absolute illogicality. Customer loyalty nil.
madf
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Before I started driving, Mum and Dad just renewed with the same company.
Then I started taking an interest and shopped around on the net. The result?
Well Dad would have paid over a grand as opposed to the £530 I've got it down to.
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Then I started taking an interest and shopped around on the net. The result? Well Dad would have paid over a grand as opposed to the £530 I've got it down to.
But is yours the same quality of cover?
I value quality of cover just as much as the nett premium. The trouble is that a lot of companies won't let you see the full terms of the policy until after you've paid the money. They might tell you a few basic points but that's all.
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Yeah, but you get 14 days to cancel after you've seen the policy if you are so inclined, don't you?
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Yeah, but you get 14 days to cancel after you've seen the policy if you are so inclined, don't you?
And what a performance it might be if you have to buy and then cancel umpteen policies before you find one that is acceptable to you.
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Well true enough. But are you saying you'd never change your policy at all unless you got sight of it first?
It would seem to make sense for all companies to post their policies on their websites - I'm sure that will happen when the interweb matures.
About 3090 then.
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Well true enough. But are you saying you'd never change your policy at all unless you got sight of it first?
Yes.
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>>I value quality of cover just as much as the nett premium.
An excellent point of view, but unusual. Most people go for the cheapest conceivable cover and then spend years complaining about the injustices of the insurance world.
>>won't let you see the full terms of the policy until after ...
I think you'll find that they have no choice. Although if they do refuse or make it difficult, then I wouldn't deal with them either.
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<<......spend years complaining about theinjustices of the insurance world.
I've been with the same insurer for 40 years so you could say I was satisfied with them! I've had numerous quotes from other companies over the years but none has equalled my insurer in terms of the combination of nett premium, quality of cover and customer service. I'm a happy little snail!
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>>I reckon that insurance companies do their best to entice you to join them year 1 and then screw you for every penny year 2/3 etc
That is not their motivation, but it is exactly the effect. I've explained this before, but I can't find it. So briefly...
Scenario..
I have 100 customers with an average premium of £100 giving a total of £10,000 revenue. It is renewal time.
90 will rejoin me whatever I do.
5 will leave but just because my premiums are too high
5 will leave whatever I do
If I offer my whole business a 10% discount then the following will happen..
90 who would have stayed anyway, still stay but the generated revenue is reduced from £9,000 to £8,100 - a loss of £900.
5 who would have otherewise left will stay giving me a gain of £450
The other 5 will still leave so I will need to gain 5 extra customers giving me another £450.
The net result is that 10% discount and the additional 5 customers have kept me at £100 customers but my revenue has reduced from £10,000 to £9,000.
If I offer NO discount to my existing business but a 10% discount to new business then the following will happen...
The 90 customers will remain with me anyway and the revenue generated by them will remain at £9,000.
I will have to go and get 10 new customers (where the cost of acquisition of 10 is not materially different to that of acquiring 5) generating a revenue of £900 bearing in mind the new 10% discount.
Therefore I still have 100 customers and my revenue is at £9,900 - £900 more than it would have been had I extended the discount to all customers.
So why on earth would I offer a discount to existing customers ?
As they say "....brand new customers only".
I know there are many other factors and it is much more complex than that, but this is essentially the position with insurance, bank accounts, mortgages and all those other things which annoy you. So you should shop around - regularily and thoroughly.
And it will stay that way until the consumers at large in the UK become an awful lot more objective and a great deal smarter - I shouldn't think that they're too worried.
M.
p.s. I may or may not have made a maths error or a typo, but even if I have the principle remains.
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Thanks for that excellent explaination No FM2R. It's pretty much what a broker told me.
Last year my insurance was £700. As a result of those two claims in the past 3 months most companies wanted upwards of £2500 for the coming year.
My current insurer explained that my NCD had reduced to 0 because they had never seen proof of my previous NCD when moving to them 3 years ago. I was sold the insurance with the car, and no one ever asked for proof. As a good will gesture (yeah, sure) they have offered a quote of £1700, which I took.
I played around with internet quotes. 0 NCD gave £2500+, where 9 years gave £900. If I wasn't the honest type I might have told my next insurer I had 5 years, as I don't recall anyone asking for proof of NCD at each time I've had to claim.
I can also see how it's attractive to drive without insurance. Again, I am just too honest, and too much of a mug to do that. I enjoy my commission in the RAF VR(T) too much to risk losing it over a criminal conviction.
What really annoys me is that the figures quoted are all generated by a computer which can not be subjective. In 12 years of driving I have had 4 accidents. 2 where I was found to not be at fault, 1 where the other driver was taken to court because the police believed he was at fault (but insufficient evidence) and 1 claim for damage done by an unknown party (a neighbour!) while parked. Would the premium be £1700 if an underwriter actually sat down and looked at my 12 year history?
It's certainly been a learning experience.
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>>Would the premium be £1700 if an underwriter actually sat down and looked at my 12 year history?
Probably not. In the case of premiums its usually too difficult to fight your way through to underwriting staff. However, for other things, cover issues for example, it is usually worthwhile and frequently essential to speak to either underwriting or claims assessing staff.
As I may have said before, you wouldn't ask the person on the checkout at Tescos what the nutritional and chemical content of the food was.
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I'm quite happy with my premium. It's 3.5% of the value of my car, so on that basis one total-loss accident would wipe out all the premiums I've paid in the last 29 years just to replace the car. And the cost to my insurer of me having such an accident would be much more than just the replacement cost of the car.
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