No Claims Discount when cancelling
Discussion
I'm finding it hard to get clarity on the definition of ncd.
Some articles say you lose your ncd (forgo the opportunity for the months of NC to accumulate into a useable and verifiable years ncd) if you cancel your policy.
Some articles say this only happens if you change insurers.
Some articles are non committal and use the word "may" a lot in conjunction with a poorly definitive description of what ncd is anyway.
The point is, I have discovered in the"Alice in Wonderland" world of insurance risk an insurer may charge up to double the annual premium pro rata for a different car when switching from one car to another on the sane policy, compared to cancelling the current policy and taking out a new policy.
I have two questions.
1) do you lose ncd (what does this actually mean) if you cancel to switch insurers only or even if you cancel and keep the same insurer? Ncd IMO is very unclear.
2) Does ncd have anything at all to do with the law, OR is it entirely up to an insurance company to decide (within the context of their written policy t&c) what evidence they are prepared to accept as evidence of not having claimed for an overall period and what discount they are prepared to provide based on that evidence, but the law cannot make them and provides no rules for them to follow?
Some articles say you lose your ncd (forgo the opportunity for the months of NC to accumulate into a useable and verifiable years ncd) if you cancel your policy.
Some articles say this only happens if you change insurers.
Some articles are non committal and use the word "may" a lot in conjunction with a poorly definitive description of what ncd is anyway.
The point is, I have discovered in the"Alice in Wonderland" world of insurance risk an insurer may charge up to double the annual premium pro rata for a different car when switching from one car to another on the sane policy, compared to cancelling the current policy and taking out a new policy.
I have two questions.
1) do you lose ncd (what does this actually mean) if you cancel to switch insurers only or even if you cancel and keep the same insurer? Ncd IMO is very unclear.
2) Does ncd have anything at all to do with the law, OR is it entirely up to an insurance company to decide (within the context of their written policy t&c) what evidence they are prepared to accept as evidence of not having claimed for an overall period and what discount they are prepared to provide based on that evidence, but the law cannot make them and provides no rules for them to follow?
No idea on 2) but it's definitely an interesting question I'd like to know the answer to.
My understanding of NCD/NCB is that if you cancel halfway through a year, you lose that year's NCD/NCB accumulation but keep it up to the last time you renewed. So if you had 4 years NCB and were 6 months in to this year, you'd cancel and would still have 4 years NCB evidenced by your current insurer when asked by the next insurer, but the 6 months from this year wouldn't count for anything.
Clarification in writing from your insurer would remove any doubts, though, and give you something to wave at them if they mess you about.
My understanding of NCD/NCB is that if you cancel halfway through a year, you lose that year's NCD/NCB accumulation but keep it up to the last time you renewed. So if you had 4 years NCB and were 6 months in to this year, you'd cancel and would still have 4 years NCB evidenced by your current insurer when asked by the next insurer, but the 6 months from this year wouldn't count for anything.
Clarification in writing from your insurer would remove any doubts, though, and give you something to wave at them if they mess you about.
So in this case where you have to change vehicle and your current insurer forces you (by making the switching cost so prohibitive) into a new policy with them, you would not benefit from the 6 months (for example) on the previous policy.
This certainly seems unfair and the exorbitant switching cost "could" be seen as manipulative.
It certainly seems the cost of insurance (similar to many things in life) does not reflect perceived risk, even with the same insurer.
This certainly seems unfair and the exorbitant switching cost "could" be seen as manipulative.
It certainly seems the cost of insurance (similar to many things in life) does not reflect perceived risk, even with the same insurer.
Ring them up?!
You'll probably find that one year no claims bonus is actually "awarded" after the 10th month of the policy (may vary from company to company). So if you wait a few more months, then switch you'll have the extra year no claims.
I'm currently 7 months into my third year on a runaround vehicle, with a run of the mill insurer (AXA) and they couldn't give me a quote on a Clio 182 because they flat out don't insure them. So I can either wait till January, get my 3rd year NCB and switch, find another car that I want/they'll insure or cancel now and lose 7 months towards a 3rd year.
You'll probably find that one year no claims bonus is actually "awarded" after the 10th month of the policy (may vary from company to company). So if you wait a few more months, then switch you'll have the extra year no claims.
I'm currently 7 months into my third year on a runaround vehicle, with a run of the mill insurer (AXA) and they couldn't give me a quote on a Clio 182 because they flat out don't insure them. So I can either wait till January, get my 3rd year NCB and switch, find another car that I want/they'll insure or cancel now and lose 7 months towards a 3rd year.
Facts:
After 6 months on the current policy, the current insurer want £1800 pa premium (prorata on the difference cost to switch) for the new vehicle or £770 on a new policy where you (effectively) lose the 6 months towards first year of ncd!
Maybe I just haven't been doing this stuff long enough to think it's all normal, but this seems very odd to me. Other quotes are £2500 upwards as far as you like!
After 6 months on the current policy, the current insurer want £1800 pa premium (prorata on the difference cost to switch) for the new vehicle or £770 on a new policy where you (effectively) lose the 6 months towards first year of ncd!
Maybe I just haven't been doing this stuff long enough to think it's all normal, but this seems very odd to me. Other quotes are £2500 upwards as far as you like!
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