No-claims discounts at risk due to industry practices
Experienced drivers run the risk of losing their no-claims discounts due to a growing practice across the car insurance industry to artificially limit the information given in renewal documents. When taking out a new policy, drivers are required to provide evidence of their entitlements to the, usually when filling in the form of the renewal letter from the insurer.
However, insurers have begun to limit the number of years’ entitlement on the letters, meaning that drivers with decades of experience are being issued documents that effectively erase it.
Insurers award a percentage discount based on years of claim-free driving. The discount may stop increasing after a certain point but the number of claim-free years should not. Most insurers limit the percentage discount after between five and nine years. But by tying proof of claim-free driving to the discount caps, those with decades of driving without a claim could find their documentation issued at the end of the policy term and only reflect the maximum recognised no-claims discounts.
Because caps vary between insurers, many people are finding themselves falling through the gaps that appear as they transfer between one provider and another.
If drivers have long-standing no-claims discounts, these steps can help ensure they can properly document and preserve it:
- Request proof at every renewal – Ask your insurer for a certificate or letter confirming your full NCD, not just the maximum they apply for discount purposes.
- Keep copies of all correspondence – Store renewal documents, confirmation letters, and any emails that reference your NCD. These can serve as evidence when switching providers. You may need to string documents together from multiple years to prove your full entitlement, although many insurers say they will only accept documents issued in the last 24 months.
- Check before switching insurers – Different insurers recognise different maximum NCDs. Make sure your full history is documented before moving to a new provider.
- Highlight your long-term NCD – When getting quotes or providing proof, explicitly state your full historical NCD and ask the insurer to note it in your policy records.
- Escalate if needed – If an insurer refuses to provide proof of your full NCD, escalate the issue to the Financial Ombudsman Service (FOS), citing their guidance on recognising higher NCDs than a company may accept.
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