I made a claim earlier this year, which is still unresolved. At the time of the accident I had 8 years NCD. My insurer told me that I would lose 2 years NCD if the claim is settled against me. However, when my broker sent through my renewal documents they had deducted 5 YEARS NCD. When I queried this, they told me that because I had over 5 years NCD in the first place, they automatically reduced it by 5 years. Is there an industry standard that insurers should follow when reducing NCD, or can they just do as they please? Can anyone help?

TraceyB67:I made a claim earlier this year, which is still unresolved. At the time of the accident I had 8 years NCD. My insurer told me that I would lose 2 years NCD if the claim is settled against me. However, when my broker sent through my renewal documents they had deducted 5 YEARS NCD. When I queried this, they told me that because I had over 5 years NCD in the first place, they automatically reduced it by 5 years. Is there an industry standard that insurers should follow when reducing NCD, or can they just do as they please? Can anyone help?

What company was this? There's probably a perfectly reasonable explanation... after the insurance company name is given...

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Coyote

TraceyB67:I made a claim earlier this year, which is still unresolved. At the time of the accident I had 8 years NCD. My insurer told me that I would lose 2 years NCD if the claim is settled against me. However, when my broker sent through my renewal documents they had deducted 5 YEARS NCD. When I queried this, they told me that because I had over 5 years NCD in the first place, they automatically reduced it by 5 years. Is there an industry standard that insurers should follow when reducing NCD, or can they just do as they please? Can anyone help?

In actual fact, it's clear what has happened here.

The insurer you're currently with probably only offer a maximum NCD of 5 years. (Direct Line, More than, other silly companies that should be avoided etc.).

Therefore if you are under the impression that you had 8 years and also that they took 5 away (leaving three), it suggests that they have only taken 2 away from their maximum 5 to leave 3.

If that makes sense (?!)

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Coyote

The company is Budget. The original policy documents they sent me showed 8 years, if 5 is their maximum I would assume it would have shown 5, wouldn't it?

TraceyB67:The company is Budget. The original policy documents they sent me showed 8 years, if 5 is their maximum I would assume it would have shown 5, wouldn't it?

Hm. Yep. Budget give 9 I believe. In that case I'm not too sure, especially whereby the insurer already said you would lose only 2 years.

Perhaps this is an oversight by the insurer/broker. I don't know why they are saying 'you had over 5 years NCD they automatically reduce it by 5 years'. Seems pretty harsh.

I'm not aware of any industry standard surrounding this. An insurer is entitled to charge you what they see fit. If you don't like the price, you go elsewhere. If you don't resolve this issue, you will have to explain the situation to the next insurance company although this is not going to get you anywhere special because you will only have proof of 2 years.

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Coyote

Although some companies allow a maximum NCD of more than 5 years, the industry standard for maximum NCD is still 5 years.

Therefore if you have more but then make a claim, the insurance company will deduct the 2 years you lose from the industry standard of 5.

Hi Isis

That's really useful to know - thanks very much for clarifying (couldn't get any sense out of Budget when I asked them, but then that's call centres for you!)

isis:

Although some companies allow a maximum NCD of more than 5 years, the industry standard for maximum NCD is still 5 years.

Therefore if you have more but then make a claim, the insurance company will deduct the 2 years you lose from the industry standard of 5.

Hmm. Are you sure about that? The industry standard is set by a percentage not a year, it's how much % that company give for each year.

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Coyote

Yes, I am sure.

Maximum %'s of discount can vary considerably by insurer, but the number of maximum years is generally 5 although some companies give a max of 4 and others go up to 9.

It's called the 2 year step back scale. You wont find any insurer give any more than 4 years ncd after a fault/ pending claim no matter how many years ncd you have beforehand.some will even reduce it to 0 after having 2 fault claims within the same period of insurance cover.if the claim is resolved then it will be re instated any and priemiums due backdated.