Car insurance shock

Careful drivers may lose NCB
8 Aug, 2012 9:00am Julie Sinclair

Insurers aren't recognising drivers with no claims, prompting calls for industry database to verify discounts

Millions of motorists could be overcharged for their car insurance, because cover providers are ignoring up to 16 years’ worth of claim-free driving. Auto Express made this shock discovery after an investigation which revealed motorists changing insurer couldn’t guarantee the full number of years they’d driven without a claim would be transferred with them.

In a ring-round of insurers, we asked what the maximum no claims bonus (NCB) a customer could accrue was. And as our table opposite shows, this can vary dramatically – from 20 years with AXA to only four with SAGA.

This will be reflected in the price of the policy, so shopping around should overcome that. However, when Auto Express asked how many claim-free years would be cited if a motorist was to switch insurer, the limits were the same. This has a serious impact on a motorist’s ability to access discounts offered by providers who take more years of claim-free driving into account.

This problem was brought to Auto Express’ attention when reader Sean Lowe of Ely, Cambs, was set to miss out for exactly that reason. Sean told us he had switched from Aviva to Direct Line in 2009, and when he renewed a year later, he queried a hiked premium. “Direct Line said it was based on six years’ NCB – five with Aviva and one with them – but I hadn’t had a claim since 1998!”

Direct Line would have discounted up to eight years’ NCB, but as Aviva’s limit is five, that’s how many were transferred when he left. After Sean complained, Direct Line agreed to increase his discount to its maximum.

Auto Express complained to the Association of British Insurers, arguing that the total number of claim-free years should appear on every policy document, irrespective of individual discount limits.

Its spokeswoman said the industry was “working to improve the portability of no claims discounts”, adding it was “considering establishing a no claims discount database” which would “allow insurers to validate discounts at the point of quote”.

In the meantime, SAGA said it would reveal a driver’s number of claim-free years to a new insurer if pressed. Aviva argued: “Our statistics show there’s little change in risk for drivers once they have five years’ no claims discount.”

Discount heroes and zeroes

We ran 10 of the UK's leading insurers to find out how many years of no claims bonus (NCB) a policyholder can accrue, and how many years NCB can be transferred by a customer switching to a rival company. Here are the results:

Insurer NCB limit (years) NCB transfer limit (years)
AXA 20 20
Admiral 15 99
Esure 10 Unlimited
RSA (incl MoreThan) 9 9
Churchill 9 9
Privilege 9 9
Direct Line 8 9
Aviva 5 5+*
Liverpool Victoria 5 5
SAGA 4 4+*

*Insurer indicates extra years were accrued, but doesn't specify how many

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Funny how these stories with insurance companies keep showing up. Insurance premiums increasing almost 100% in 2 years. And stupid Cameron office and the MPs dont regulate it, keeping this charade going. I wonder how many MPs are backhanded every year.

They all seem to do their own thing. We say if you have more that 5 years NCB look for up to 75% discount. So if LV = 75% discount for 5 years NCB max (as per chart) the others might award more years but not reward for these... Very confusing; always best to shop around of course.

I experienced the same thing when switching from Aviva to Direct Line last year when my 19 years no claims was reduced to 5 years. This was because Direct Line couldn't verify my no claims history electronically (they couldn't get their head around Aviva using zeroes and letter O's in my policy number so couldn't confirm it with Aviva) so they used Aviva's renewal letter that only quotes their maximum no claims of 5 years.
I was assured the problem was fixed by Direct Line after several complaints, only to find a renewal this year calculated from only 6 years no claims! After a lot of effort and frustration, they eventually 'restored' my no claims to 19 years, which should actually be 20 years, but I'm too fed up to argue any more. They also said that I wasn't due a refund because 5 years is their maximum, which doesn't appear to be the case looking at yout table above!
I also contacted the FSA and Financial Ombudsman to put pressure on insurance companies to quote actual no claims discount years on renewals - both refused to get involved.

The ABI say they are looking into an NCD database?? The DVLA have been working on a Driving Licence database for what feels like 10 years; this was originally planned for release in early 2012, now 2014.. who knows when it will be done.. I cant help but feel it will be the same for the NCD database..
Until this is done Policy Holders will continue to suffer and it will remain near impossible for insurers to verify the correct information between themselves!