NCD - is it just a scam/"loyalty" scheme?

[Haggisman]

I was thinking on the way to work this morning - what is actually the point in NCD?

In my case at least, it has a pretty negligible effect on my premiums (~5% difference between 1 year and 3 years).

It doesn't really reflect the number of years you've had with "no claims" since you only lose 2 years if you make a claim anyway (e.g. if you had 5 years and you make a claim, you go down to 3), and this is compounded by the fact you can protect your no claims as well.

It also seems kind of obsolete since you have to declare any claims you've made - which has far more of an impact on premiums.

So really, the only reason I can have for NCD to exist is to dissuade you from changing your policy in the middle of the term, because you won't earn NCD for that year? But then if it doesn't really make a difference, does that matter? Or are we just being conditioned to believe in hoarding NCD because it's in the insurance companies' best interests?

 

[rodenal]

It does make a big difference in the first couple of years, but outside that term I'd tend to agree with you.

I went from 6 years down to 3 (to this day they can't explain why this is the case despite the loss supposedly being 2 years) before my last renewal so now I obviously need to declare a claim.

When I checked at renewal, the difference between declaring 3 years and 6 years ncb was completely negligible with a few different companies - the only significant driver was having had an accident. Even then it makes very little difference to my premium tbh.

The rouse works though - I very rarely change a policy mid term when changing cars etc even if I think the extra charge is a bit excessive. It needs to be significantly more than the difference seen through another policy before I tell them to forget it

 

[traveyb]

IMO the whole insurance system (not just cars, but this post is just relevant for them) is a complete sham.

The whole "your statistically more likely to have an accident after being hit" and how your job role/company's market can affect this also is just BS.
I remember I originally had Computer Engineer as my job title (it's what I do), then I found out it's about 5% cheaper to say Computer Tech. Why should I pay more for this? Surely if I was doing a lot of business miles/traveling to multiple places of work I would have business class insurance?

The black box stuff is laughable also. The worst driver could brake and accelerate slowly, they could still jump red lights, not use their indicators and pull out of junctions without looking. I know it's aimed at younger drivers to see what they are up to at night though.

I've had my license for about 10 years, only been driving 5 of those. In those 5 years i've had 2 claims. One for a hit and run outside my house, which in hind site I shouldn't have claimed on the insurance but I was trying to do the right thing incase the Police had caught them. The second was a prang I had which both parties were at fault but it was closed without claim.
All of this has made my insurance sky high (I'm 27 and pay about £800-900 driving an A3 2.0 TFSI, granted I now have 2 years no claims, but this really hasn't had an affect). Tempted to just get a Fiesta 1.0 EcoBoost to get my insurance down

 

[GhostWKD]

The whole "your statistically more likely to have an accident after being hit" and how your job role/company's market can affect this also is just BS.
I remember I originally had Computer Engineer as my job title (it's what I do), then I found out it's about 5% cheaper to say Computer Tech. Why should I pay more for this? Surely if I was doing a lot of business miles/traveling to multiple places of work I would have business class insurance?

In what way is it BS? If they can statistically prove that people who give the job title Computer Engineer have more claims and/or more expensive claims than those who would describe themselves as Computer Techs, then why shouldn't they charge more to 'Computer Engineers'.

Don't get me wrong I kind of see where you're coming from but if the statistics back it up (just like the fact if you've had an accident you're more likely to make another) then why shouldn't you have to pay more if you're statistically more likely to be making a claim.

Don't work in insurance but I spent years working with similar scorecards/predictive models

Edit: Should also mention, NCB is obviously just one piece of a puzzle but where an extra year may make 5% difference which isn't much on a cheap car policy, it can make a larger difference on more expensive policies etc. Mirroring NCB on my Noble (rather than having a seperate set as I do) would've put my premium up about 70%, I imagine no NCB to use on it would make it much higher.

 

[Haggisman]

In what way is it BS? If they can statistically prove that people who give the job title Computer Engineer have more claims and/or more expensive claims than those who would describe themselves as Computer Techs, then why shouldn't they charge more to 'Computer Engineers'.

Don't get me wrong I kind of see where you're coming from but if the statistics back it up (just like the fact if you've had an accident you're more likely to make another) then why shouldn't you have to pay more if you're statistically more likely to be making a claim.

Don't work in insurance but I spent years working with similar scorecards/predictive models

Edit: Should also mention, NCB is obviously just one piece of a puzzle but where an extra year may make 5% difference which isn't much on a cheap car policy, it can make a larger difference on more expensive policies etc. Mirroring NCB on my Noble (rather than having a seperate set as I do) would've put my premium up about 70%, I imagine no NCB to use on it would make it much higher.

What would you class as an "expensive" policy? I'm paying ~£1,200/year, and the difference between 1 year and 3 years NCD is around £50.

Speaking of statistics...

2 people with the same job title, same car, same age, going to be doing 15k miles in the year.

Both been driving 5 years and have had insurance for those 5 years, one has 5 years NCD and no claims, but hasn't actually sat in the driver's seat in those 5 years, the other has 2 years NCD and a claim 2 years ago, but has been doing 30k/year for the last 5 years.

So which is statistically more likely to have an accident?

 

[Jez]

NCB is long been a total nonsense.

Companies dish out NCB simply by asking them to do so (Admiral have given me years and years of NCB for nothing for example), other companies issue a year after 9 months, 10 months, etc.

 

[cheesyboy]

What would you class as an "expensive" policy? I'm paying ~£1,200/year, and the difference between 1 year and 3 years NCD is around £50.

Speaking of statistics...

2 people with the same job title, same car, same age, going to be doing 15k miles in the year.

Both been driving 5 years and have had insurance for those 5 years, one has 5 years NCD and no claims, but hasn't actually sat in the driver's seat in those 5 years, the other has 2 years NCD and a claim 2 years ago, but has been doing 30k/year for the last 5 years.

So which is statistically more likely to have an accident?

£1,200/year?!

Why so expensive? I was paying less than that when I got my first car at 21.

 

[Jez]

What would you class as an "expensive" policy? I'm paying ~£1,200/year

I would only class that as a good value policy if it is covering a small fleet of super cars, you dont mention what it is covering.

My multi vehicle insurance policy this year was £720 which sounds expensive, but it is covering around 1000BHP of vehicles.

 

[Haggisman]

I would only class that as a good value policy if it is covering a small fleet of super cars, you dont mention what it is covering.

My insurance policy was £720 which sounds expensive, but it is covering around 1000BHP of vehicles.

2002 Mazda 6 Sport (2.3L petrol ~ 166bhp)

£1,200/year?!

Why so expensive? I was paying less than that when I got my first car at 21.

Birmingham postcode

(My old Bath postcode drops it down to £400... My mum's Carlisle postcode drops it to £350!)

 

[Jez]

Bloody hell

Yep, thats an extremely expensive policy for a single normal vehicle

 

[GhostWKD]

What would you class as an "expensive" policy? I'm paying ~£1,200/year, and the difference between 1 year and 3 years NCD is around £50.

Speaking of statistics...

2 people with the same job title, same car, same age, going to be doing 15k miles in the year.

Both been driving 5 years and have had insurance for those 5 years, one has 5 years NCD and no claims, but hasn't actually sat in the driver's seat in those 5 years, the other has 2 years NCD and a claim 2 years ago, but has been doing 30k/year for the last 5 years.

So which is statistically more likely to have an accident?

Apologies should've clarified - by expensive policy, I mean cars which are expensive to insure regardless of other factors. IE I'd expect NCB to make a much bigger difference on a brand new 3.0 BMW compared to a 1.0 Aygo or similar.

I get what you're saying in that instance, but when designing pricing models they will need to find variables which are easy to verify and prove. It would be impossible to use abstract measurements to build a statistically sound model.

Appreciate the reality that if someone crashes into you you're not now more likely to have a crash when you next drive to work. However statistics will dictate that those who have been in an accident are going to be more likely to have another and therefore will present more of a risk to the insurer which will have to be priced accordingly.

You could also say that contacting Vodafone customer services a few months before the end of your contract doesn't make you more likely to leave the phone network, but my models would've said it did make you statistically more likely to leave

Edit: That's some expensive insurance! I think I pay about £700 for my Noble and a bmw 325ci - ironically the Noble is cheaper (go statistics lol)

 

[Haggisman]

You could also say that contacting Vodafone customer services a few months before the end of your contract doesn't make you more likely to leave the phone network, but my models would've said it did make you statistically more likely to leave

So it was you calling me from Vodafone yesterday then?!

Edit: That's some expensive insurance! I think I pay about £700 for my Noble and a bmw 325ci - ironically the Noble is cheaper (go statistics lol)

I would say I'm surprised, but I'm not. I can insure a nice tail-happy s2000 or a 5l v12 Jag for less than a diesel Mondeo

 

[GhostWKD]

So it was you calling me from Vodafone yesterday then?!

Not quite, busy avoiding them too Years ago I used to build the predictive models for VF customer behaviors/revenues etc

I would say I'm surprised, but I'm not. I can insure a nice tail-happy s2000 or a 5l v12 Jag for less than a diesel Mondeo

In my experience there's nothing out there more expensive to insure than an S2000

 

[cheesyboy]

2002 Mazda 6 Sport (2.3L petrol ~ 166bhp)



Birmingham postcode

(My old Bath postcode drops it down to £400... My mum's Carlisle postcode drops it to £350!)

Well that's downright ridiculous. Is car crime through the roof in Brum?

Moving from Bristol to the Gloucestershire countryside saved me a little, but it wasn't a massive change - about 10%

 

[Scottland]

Not quite, busy avoiding them too Years ago I used to build the predictive models for VF customer behaviors/revenues etc



In my experience there's nothing out there more expensive to insure than an S2000

I've heard this but my current car (Focus ST) is more expensive than my S2000 (granted only by about £20).

 

[p1RATE]

Well that's downright ridiculous. Is car crime through the roof in Brum?

Its one of the more expensive areas. I was shocked, i did a quote on my old supra and it went from about £500 to £3000 just for the post code change. I think the area suffers from a lot of fraudulent whiplash claims etc.

I worked with a few people that just didn't pay to insure themselves because it was extortionate. £5000+ quotes on group 1 cars etc. It's quite broken imo and encourages people to break the law as the barrier to legally insure a car is just unrealistic.

 

[degen]

I did a quote for my car with 8 years no claims and it was more expensive than having 7 years. Only by £2 but still it makes no sense.

 

[Rroff]

Well that's downright ridiculous. Is car crime through the roof in Brum?

Moving from Bristol to the Gloucestershire countryside saved me a little, but it wasn't a massive change - about 10%

There is a massive difference in my quotes for my old address near London and my current one in the middle of Somerset - performance model Golf is something like £38/m v £79/m.

 

[Haggisman]

Its one of the more expensive areas. I was shocked, i did a quote on my old supra and it went from about £500 to £3000 just for the post code change. I think the area suffers from a lot of fraudulent whiplash claims etc.

I worked with a few people that just didn't pay to insure themselves because it was extortionate. £5000+ quotes on group 1 cars etc. It's quite broken imo and encourages people to break the law as the barrier to legally insure a car is just unrealistic.

Yeah, I think the area has one of the highest concentrations of unlicensed drivers and a lot of "crash for cash" scams.

The high insurance isn't really surprising given the "standard" of "driving" I see every day to be honest! Not claiming to be a perfect driver, but I at least try to abide by things like Give Way signs, red lights, lane discipline, and maintaining a safe distance from the car in front, which is more than can be said for 90% of people around here

 

[mccarf]

I don't see why it's not like other countries where you insure the car and not the person driving it. As mentioned above, just because I change jobs or address doesn't affect my driving habits so it's stupid to get penalised for it. If it works in other countries why not here?