# re: Step-back no claims discount and Protected no-claims discount



## eliza (18 Oct 2005)

Hi,

I have just received an online quote of 250 euro for comprehensive insurance on a new family saloon. I have a full no-claims discount.

Step-back no claims discount will cost 18e extra. 
In the event of a claim, my 50% discount becomes 20%.

Protected no-claims discount will cost an extra 40e on top of that.
I can have two claims in a three year period without affecting my discount.

In theory, this looks reasonable value.  I am not a great driver as I have had to sort out a little dent or two in the past without resorting to the Insurance company.

In practice though, the above options protect my no claims discount not my no claims status. What is there to stop the Insurance company upping the cost of my insurance cover considerably, while still keeping my discount, if I do make a claim. I won't be in a position to shop around as I would no longer have a no-claims status.

Has anyone got any experience or thoughts on this?

Regards, Liz


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## quarterfloun (19 Oct 2005)

As I said in a different thread NCD is a farce but worth having!

If you make a claim and then when you go to insure next year the following will happen:

Your NCD will be applied BUT the loading of the claim will not only negate the effect of NCD but may well make the insurance more expensive than before.

Example

Current cost of insurance 100
 less 65% NCD = 35

You make a claim

Current cost of insurance 100
plus Claim Loading 50% = 150

minus 65% NCD = 97.5

So what happens in this scenario - you spend 62.5 more per year than before but your NCD is applied (and did you get it protected). 

You have to remember that insurance is a numbers / risk game. They want as many ways of taking money from you with as few ways of paying out. A good book of cover should net a good underwriter 10-20%.

NCD, protected NCD, Breakdown, Legal cover etc. etc. are all part of the huge tapestry of cross charging, revenue generating, COMMISSION driven industry.

IMHO you should get it but it won't save you money in the event of a claim, it will stop you paying out a lot more though.


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## DrMoriarty (19 Oct 2005)

eliza said:
			
		

> I can have two claims in a three year period without affecting my discount.


Check the small print. There's usually a monetary upper limit involved. On my old Hibernian policy it used to be <€3,000 worth of claims in any three-year period.


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## Ravima (19 Oct 2005)

FBD give a fully protected NCB. I don't know what their quote would be for you, you could always try their website. There are no pre conditions, simply that your NCB is not affected at all in the event of a claim. That is better than the one that merely steps back your NCB or has the qualification that the claim cannot cost more than a set amount.


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## eliza (21 Oct 2005)

Quarterfloun
Thank you very much for your invaluable and very informative insight. 

DrMoriarty:
A very important point. I will certainly call the insurance company and check the small print. 

Given Quarterfloun's outline above, the full cost for me of making a claim would be:
5 (years extra loading after claim) * 0.5 (50% extra loading on premium) * 900 (gross premium) * 0.5 (50% discount) which works out at 1125 euro!


Ravima:
Thank you for your suggestion. Unfortunately, the quote I got from FBD is 419euro which was alot more than my original 250euro basic quote from Hibernian.


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## daltonr (24 Oct 2005)

The problem with Insurance is that if you do have a claim you won't be able to get insurance with ANY other company for at least 3 years.   All of the companies that I know of are in on this little agreement.   

It means that what ever the percentage of drivers who have had a claim in the past 3 years, that percentage are unable to shop around,  leading to the loading mentioned above.   Personally I think it's anti-competitive and bordering on cartel behaviour, but the underwriting rules of Insurance companies are pretty much a closed book.

I have been very pleasantly surprised with my quotes for the last two years,  I think going over 30 made a huge difference.   However the company I'm with was as much as 66% cheaper than some other quotes.    Also when I had a fairly small claim last year I was worried it would drive my premiums through the roof,  but the company behaved very well, dealt with it very professionally and my premium actaully dropped slightly this year.

The claim was Tiny (about €2500) but given that I can't shop around I was very happy with their quote and service and I wouldn't have moved in any case.
I had step back protection.

The company is SERTUS,  In Galway,  go through your broker for a Quote.
I went through Creane and Creane in Wexford.  If you've ever read any of my posts about Insurance companies you'll know I don't hand out praise lightly.

-Rd


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## eliza (24 Oct 2005)

daltonr, thank you for your feedback. 

The problem with insurance is that nobody can really assess the true value for money of an insurance policy purchased year-in year-out until they have occasssion to file a claim against the insurance company.


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