No Laws to Stop Insurers Deleting your No Claims Bonus Years?

Thanks to the EU, the 5th Directive took over from the 4th Directive and covered a number of points relating to motor insurance. It was adopted on May 11 2005 and came into force on June 11 of that year. While much of it’s provisions were already part of UK law, such as providing compensation from the Motor Insurance Bureau where someone is involved in accident and the other car is not insured or has false number plates, it did include the right for a policyholder to ask for evidence of their claims experience with their insurer when they leave.

While this looks good, it does not appear to make it compulsory for insurers to offer this information, nor does it indicate how many years they should go back and what detail should be offered.

So can you lose your proof of no claims bonus years? From what we’ve seen – yes, but it is a rare practice:

While most insurers are happy to pass on details of their insurance history with their customer, those which offer just a few years of no claims bonuses do sometimes limit the number of years they are willing to disclose. Many claim that it is simply the limitations of their systems which prevent them from doing so, but this limitation could inadvertently cost their customer money should they go to an insurer who offer a higher number of years discount on their policy.

Diamond, Esure and Sheilas Wheels all offer their customers up to 20 years (or more) proof of their history with their company, a figure which would prevent any problems with subsequent insurers, as no insurer appears to offer discounts on any more than 9 years of claim free driving.

Swiftcover.com will offer 5 years worth of discount for a careful driver and say they will give proof of more than 5 years or up to the total the customer has gained with them. Both Saga and Churchill were not forthcoming when it came to a definitive answer to their policy on offering proof of no claims. In both cases these insurers only offer a discount up to 4 and 5 years respectively – somewhat less than other insurers.

Aviva will also offer a discount up to 5 years and say they offer proof up to 5 years as standard, but may offer more proof if asked. They suggest keeping records of any no claims period built up with another insurer, as they will not offer proof of any no claims built up before the policy is taken out with them – even if this was used as part of the original discount offered.

While many policyholders may take great pride in their many years of careful driving and may expect that they will get huge discounts on their insurance as a result, it is not always the case. In fact, when searching for insurance it is sensible to take the whole policy into account. Many insurers may offer what appear to be huge discounts of up to 75%, but if it is an already expensive policy, then the saving may disappear.

Ian Crowder of the AA points out that what really matters is the insurers calculation of risk, which is based on many factors, not just the number of years claim free. Therefore when searching for an insurance quote, a customer may well have quotes which vary enormously depending on the insurer. Once the no claims bonus is added, the quotes from an expensive insurer may well become cheaper and vice versa. The percentage of discount varies as does the number of years discount offered.

So it is not simply a case of applying for your claims history, taking that to your new insurer and expecting a huge discount. The overall value of the product should be taken into account. Despite the 5th Directive and the right for a customer to ask for this information, it may not actually do them very much good at all.

* Despite repeated attempts to obtain this information we had still not received it prior to publishing this article.