No claim discounts - how do they work?

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Sat 5 Nov 2011 14:55
No claim discounts - how do they work? - Mad Maxy

Long ago it used to be that after your first claim-free year your premium reduced by x%, then after the second by a further y% until some maximum % was reached - say 60%. Given that car insurance pricing is much more sophisticated these days... how do things work now? My guess is that claim history is just one thing that goes into the algorithm and that any adjustments in respect of claims are much more finely graduated.

And what happens in the event of a claim? Does the insurer put you back at square one, or do they recognise one's previously good claims record? (In my case only one over 20 years ago when the car was broken into.)

Why do I ask? I've just had an encounter with a careless fox which I think will require a new bumper assembly to my (somewhat expensive) car to return it to pristine condition. My current premium is about £450. Assuming no general 'car claim cost inflation', if I were to claim how much is cover likely to cost next year?

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Sun 6 Nov 2011 13:20
No claim discounts - how do they work? - Chris M

Read your policy document! It will tell you how much NCB you'll loose after one claim. How much excess are you going to have to pay?

Assuming you have 60% at present, your base premium will be £1,125. If you loose 2 years, you'll be paying £675 next year and £562.50 the following year. Assuming no rate increases (unlikely), that's about £350 extra over the two years plus your excess. Your bumper has got to be at least £500 for it to make any sense claiming (or even reporting the accident) and you will have to declare the accident if you were looking for alternative quotes come renewal time.

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Sun 6 Nov 2011 19:52
No claim discounts - how do they work? - oldroverboy

Why do I ask? I've just had an encounter with a careless fox which I think will require a new bumper assembly to my (somewhat expensive) car to return it to pristine condition. My current premium is about £450. Assuming no general 'car claim cost inflation', if I were to claim how much is cover likely to cost next year?

If you look for a second hand bumper and you might be lucky and get one the correct colour get your local indy bodyshop to fit it, over the years it will be cheaper for you.

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Sun 6 Nov 2011 21:03
No claim discounts - how do they work? - jamie745

Car Insurance is another one of those mafia-esque protection rackets which we've become accustomed to. They force you to take it out, charge you a limb for it but they make it impossible to use because if you do use it they'll charge you the rest of your limbs for the rest of eternity.

Whoever came up with it is very clever i'll give them that.

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Mon 7 Nov 2011 13:16
No claim discounts - how do they work? - Ethan Edwards

Another reason to have a pretty high excess Jamie. You will only be claiming for big stuff like a total loss anyway. Second it cuts your premium. I run a £500 excess because frankly it's not worth the hassle of claiming below that. For less than £500 I could easily replace a bumper myself and have it sprayed (for cash)...no sweat. Thats my choice though.

My colleague had her Fiesta totalled (several months ago) by a driver who ran into her rear (ooh er missus) while she was stationary and trust me having decent insurance has really helped her out no end.

Working in the Insurance industry myself I find dealing with insurance companies probably less of a strain than most individuals.

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Mon 7 Nov 2011 20:47
No claim discounts - how do they work? - Mad Maxy

Thanks all.

Chris M - You're right, what I wanted to know was in the policy schedule! Turns out I have protected no-claims, so it shouldn't be too painful.

Ethan E - I work in the insurance industry too but not, as you may gather, in P&C.

I fear the motor insurance industry is not serving people well currently. And the ABI, not surprisingly, is useless as any kind of guardian of consumers' interests. Time things were shaken up.

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Tue 8 Nov 2011 12:33
No claim discounts - how do they work? - Chris M

Mad Maxy, be careful. Whilst you may have protected NCB, your insurer can up the base premium because you are making a claim.

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Tue 8 Nov 2011 15:51
No claim discounts - how do they work? - Mad Maxy

Mad Maxy, be careful. Whilst you may have protected NCB, your insurer can up the base premium because you are making a claim.

Ah, yes; interesting point. One could be forgiven for thinking that for insurers this is having their cake and eating it... though I guess that in most cases a claimant is statistically a higher risk. In my case the probability of another careless fox straying into my path is just the same as it was over all the many preceding years...

If the NCD is grown in bigger steps early on in your claims-free driving career, that seems like when protected NC counts most of all. If, by having protected NC, you save only a small percentage of your NCD, AND the insurer increases your premium anyway, it hardly seems worth paying extra for.

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Mon 7 Nov 2011 23:57
No claim discounts - how do they work? - jamie745

Another reason to have a pretty high excess Jamie. You will only be claiming for big stuff like a total loss anyway. Second it cuts your premium.

I agree, i just take the cheapest policy available and be done with it. The lowest financial outlay to satisfy Plod's computer and im more than happy.

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Thu 10 Nov 2011 04:41
No claim discounts - how do they work? - 1litregolfeater

mafia-esque as in, with a peculiarly British old school tie and funny handshake slant?

Surely you would never dare to suggest that our country operates that way.

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