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Tips for those without any No Claims Discount

Thu, 12/06/2014
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The impact that maximum No Claims Discount (NCD) can make to your yearly insurance premium is huge.  Motorists who have accumulated the maximum number of years NCD are keen to retain it and often are willing to pay an extra premium in order to protect it. Unfortunately not every driver is in such a fortunate situation.  Take for instance an individual who has been driving a company car for the past 10 years.  Being under the company’s insurance policy they would not have had the chance to build up NCD in their own name.  Should their situation change so that they no longer have use of a company car they can then find themselves having to buy an insurance policy in their own name. Despite sometimes having driven claim free for many years they do not actually have an NCD entitlement to apply to the new policy.  This, and other similar scenarios, seems to be affecting an increasing number of consumers who are considering buying insurance for the first time.   Listed below are examples of discounts that may be available to those drivers who can demonstrate a claim free driving history, albeit without any NCD of their own.  The scenarios listed below are not universal across the UK insurance market, and it is essential you consult your insurance provider or broker first to determine if any form of introductory no claims discount will be allowed.     

Second Car / Mirror No Claims Discount

 It is important to remember that no claims discount is earned on a particular car and can only be applied to that one car.  Should the car be replaced by another the no claims discount can be transferred to the new vehicle.  However, a number of people wrongly believe they can use their NCD on more than one vehicle at the same time.  This is not the case. That said, a number of insurers have recognised that drivers who obtain a second car and do not have any free NCD to apply to it, do not represent any greater risk on the second car than they do on the first. As a result it is increasingly common for insurers to permit ‘mirroring’ of the NCD by allowing the policyholder  the same level of no claims discount on the second car as they earned on the original vehicle.               

Company Car Experience

From bus drivers to travelling salesman, the vehicle is a tool of trade for many people. Persons who drive professionally could find that their experience driving their employer’s vehicles will entitle them to a no claims discount when purchasing their own private car insurance.

This concession is most commonly seem in relation to company car drivers. Persons upon being allocated a company car often dispose of their own private car. Any NCD they built up on the vehicle   is likely to become unacceptable after a 2 years period when it is not being applied to a valid motor insurance policy. This can result in a driver, who enjoyed maximum NCD on his own private motor insurance prior to being allocated a company car, finding himself with no NCD entitlement  whatsoever if, after a period of three years driving a company car, he returns to owning and insuring his own car. Fortunately there are several insurers willing offer an NCD entitlement to such a person if they can demonstrate a clean driving history on company vehicles.  Any such discounts will be dependent on written proof of the driving record on the company vehicle.  In most cases a letter from the company on their official letterhead will suffice, providing it clearly states the period the driver was covered under the company’s insurance and whether or not they were involved in any accidents. In rare cases insurers may request that the actual insurers of the company car provide the written evidence.

Named Drivers Experience

It is important to note that No Claims Discount is only earned by the policyholder in person and not by any additional drivers on the policy. Anyone who has not held a policy in their own name but has driven as a named drivers on someone else’s  policy will, therefore, start on nil NCD should they  decide to subsequently take out cover in their own name.   However, insurers are beginning to recognise and take into account the fact that these drivers, whilst not the main user of the vehicle, have nonetheless gained a certain amount of driving experience.  As result some insurers are prepared to offer a introductory No Claims Discount to those named as a driver on another policy  provided they can obtain proof form the  insurers of the period they were covered and that they were claim free.  The most common additional drivers to benefit from these introductory bonuses are the spouses of policyholders.

Contact your broker/insurer if you have driving experience as a named driver on someone else’s policy and are not sure what discounts you might be entitled to.  

No Claims Discount for Ex Motability Drivers

The Motability Scheme provides those receiving a Government funded Motability Allowance the option to lease a specially adapted vehicle to assist in day to day life.  The vehicles are insured under the  Motability fleet policy so the driver does not actually  build up NCD as the policy is not in their name. Should the Motability driver decide to end their Motability lease agreement and purchase their own private car some insurers will give credit for the time spent as a driver on a Motability policy and allow a No Claims Discount in a similar way to how they treat company car drivers.     

Van to car NCB

A common mistake made concerning NCD when seeking car insurance quotes is to assume that any NCD years built up on a van policy will be accepted by private car insurers..  However this is not the case as many private car insurers will not accept NCD that has been earned on anything other than a private car.  It is crucial therefore to check before buying the insurance in circumstances where you have recently swapped your van for a car.  The same situation applies if conversely you have sold your car and bought a van and wish to transfer any NCD from a car policy to a commercial vehicle policy.  Insurers will not allow NCD earned on a motorcycle to be applied to private car insurance.

NCD from abroad

UK insurers differ in their approach to NCD earned abroad. Some will not accept any NCD that is not earned in the UK.  However, there are a growing number of UK insurance companies that are willing to accept proof of NCD from overseas.  Those insurers who do accept foreign NCD will, of course, require written proof from the foreign insurer and it will almost certainly have to be professionally translated into English by either the foreign insurer or by a solicitor at the proposer’s expense.  If in doubt about whether or not a prospective insurer will accept NCD from abroad, make sure you contact them prior to purchasing the insurance.  Do not automatically assume that any foreign NCD will be acceptable with any insurer. 

For all the scenarios described above, it should be noted that in order to obtain a introductory discount, proof will always be required.  Insurers tend to give a time limit for provision of such proof and failure to provide proof within the designated time period can result in the discount not being allowed.

 The main point to remember is that acceptance criteria varies between insurance companies so,  if you think you may be eligible for an introductory discount, check with your broker/insurance company to establish exactly what might be available and what form of proof will be required .           

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