From August, all sales material will have to specify how much an NCB is worth and what the cost would be in the event of a claim.I insure my car with Zurich and pay extra for no claims bonus (NCB) protection. I had to make a claim this year for the first time and was told afterwards that my premium would go up despite the insurance. They said that although my NCB stayed the same, the claim still affected the premium. I don’t think the millions of people paying for this extra insurance realise this. RC, Chipping Norton, Oxfordshire
You’re right, they don’t – as the price comparison website uSwitch discovered in a survey last year. The notion that NCB insurance will prevent premiums rising after a claim is a misconception that the insurance industry has, unsurprisingly, done nothing to discourage.
In fact the discount is a percentage of the premium that is knocked off. If you pay to protect the NCB and then make a claim the premium rises, often significantly. It could well be the case that you pay more to insure the NCB than you save should your premium rise. Belatedly the Competition and Markets Authority has realised the extent of public confusion and has ordered insurers to make the pricing and potential savings of NCB insurance clearer. Come August, all sales material must specify how much an NCB is worth and what the cost would be in the event of a claim, so customers can decide if it’s worth it.
Zurich says that its future policy wording will state that NCB will not protect the overall price of an insurance policy which may increase after an accident, even a no-fault one. “We recognise the frustration that ambiguity can cause and it is for this reason that we are working hard to ensure, like the rest of the industry, that we follow this new, clarified regulation for the benefit of our customers,” says a spokesperson.
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