Married drivers are risking their no-claims discount

Couples wishing to transfer car insurance between spouses face a costly barrier, as one Independent reader found out.

When May Belt renewed her car insurance last month, she got a shock. Because she wanted to transfer the policy from her husband to herself, she was told she would lose her no-claims discount. "I couldn't believe it," says May, 75, who lives in Leeds. "I have had a driving licence for 50 years and we had built up 22 years' worth of no-claims experience, but I was told that counted for nothing. If I was to become the policyholder then I would have to start again at zero."

Her problems began because her husband, Peter, reached the age of 80 and consequently he fell victim of many insurers' policy of penalising older people. As The Independent reported last month, half of motor insurers and a third of travel insurers automatically exclude people aged 80 or older, irrespective of their health status, according to research by Age Concern and Help the Aged.

Even those that will offer cover load the premiums so much that prices soar. For the Belts, the insurance quote through the AA – which is a broker – almost doubled from £440 last year to £817, simply because Peter had had a birthday. The couple decided to shop around, but their first attempt to organise cover through the Co-operative online came to nothing. "When we tried to put Peter's birthdate in on the form, it only went back to 1930. They simply weren't interested because he was too old," reports May.

Because Peter's age had become a big factor the couple had to think again to make the insurance affordable. Focusing on the fact that May is now doing all the driving, they logically decided to have her named as the policy holder. But insurers don't deal in logic, only in perceived risks, as May discovered when she began contacting other insurance companies.

Her next step was to call AXA Direct. They told her that if she switched the policy from Peter to her, the couple would lose their no-claims discount. "They said I had not earned any years' NCD, and that the entire 22 years' NCD belonged to my husband only!"

"I found this discriminatory," says May. "In sharing the driving with my husband all those years and now doing all the driving myself, I considered that I had contributed equally to the accumulation of the 22 years-worth of no-claims discount. Just how many thousands of women reaching the same situation I found myself in, are going to face the same discrimination problem?"

May's perseverance was eventually rewarded. After getting the brush-off at another couple of insurers she was finally offered a solution by Saga insurance. "They suggested we still keep Peter as the policyholder in order to retain our 22 years no-claims record but for me to become the named driver." The simple act actually left the couple with cheaper insurance, just £360 a year.

"But we only got this by talking to people. With companies encouraging us all to buy online for cheaper deals, I suspect many women like me will fall foul of insurers' limited online application forms. There simply wasn't a box for us to tick to get what we needed," says May.

To a degree, the couple were unlucky in the insurers they chose as there seems to be no coherent policy across the industry. For instance, Andy Goldby, director of motor underwriting at Direct Line, is surprised at May's story. "Direct Line customers are able to change the main driver on their policy to their spouse or partner and pass on their accrued no-claims discount, so they can benefit from it," he says. There is a drawback with the scheme. If the person taking over the policy is regarded as a higher risk – because they have points on their licence, for instance – the cost of cover can soar. On top of that, the NCD is only relevant to one individual policy. Therefore the driver who has given their NCD to their spouse or partner cannot then also use the discount on another policy for another vehicle with another insurer.

Direct Line is in a minority, according to Will Thomas, head of motor at Confused.com. "No-claims bonus, on the whole, is not transferable from person to person," he says. "This is because you select the main driver of the vehicle when taking out the policy, and it is their good driving record that the years claim-free will be supporting."

He warns that if more companies adopted Direct Line's policy, that could cause problems. "To open up no-claims bonus to named drivers could potentially draw the validity of the clean claims record into question and devalue it, as it would become incredibly easy to add yourself on to a spouse or relative's policy with no intention of driving the vehicle and build up no-claims discount without actually doing any driving," Thomas says.

"With shared vehicles where driving is more equally split, this may seem unfair, but on the flipside of this, it also means that people who are policyholders for other vehicles do not have their no-claims bonus compromised by accidents they have in cars where they are named drivers." In other words, while the policyholders exclusively get the discount, they are also the only people whose discount will suffer as the result of an accident, regardless of whether or not they are driving.

There is some good news. Two insurers at least have begun offering no-claims bonus for named drivers. Direct Line allows up to four named drivers added to a policy to earn their own NCD. It builds up at a lower rate – around three-quarters of normal discount – but it can be used when people then take out a policy of their own with the firm. Aviva has a similar scheme, but the process is a long way away from becoming standard, and is of no use, of course, to older people who have already built up years of NCD.

"Without the insurance companies stopping being discriminatory I don't see how the situation can be resolved," says May Belt. "I've found out they do it if a husband dies. Then the insurance company does allow the accumulated NCD to be transferred to the wife. They should do the same for anyone in my position."

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