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.
Saturday 13 March 2010
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."
- 1 Gurdwaras-turned-food banks: Sikh temples are catering for rise in Britain’s hungry
- 2 Council bans use of word ‘Commie’ – but ‘fascist’ and ‘Nazi’ are fine
- 3 The man who made Femen: New film outs Victor Svyatski as the mastermind behind the protest group and its breast-baring stunts
- 4 The poorest pay the price for austerity: Workers face biggest fall in living standards since Victorian era
- 5 Mass murder in the Middle East is funded by our friends the Saudis
- < Previous
- Next >
iJobs Money & Business
£2000 - £25500 per annum + Benefits: Flight Centre Limited: We are seeking an ...
£55000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Senior Java De...
£25000 - £35000 per annum: Harrington Starr: PHP Developer (Web Developer, MyS...
£55000 - £75000 per annum + 28 Days Holiday: Harrington Starr: Flex Developer ...
Day In a Page
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.
John Lennon's childhood home in Liverpool to be sold at auction. Guide price: £150,000-£250,000.
A six-bedroom detached period property with secluded gardens, ample parking and a double garage in Rye, £675,000.
A large split-level property with three double-bedrooms and roof terrace, close to Crouch End Broadway, £625,000.
A charming barn conversion in the picturesque Cotswold village of Ilmington with three bedrooms, a detached garage, workshop and beautifully manicured gardens £675,000.
A three-bedroom new build, ground-floor flat with two bathrooms, close to Bermondsey tube, £445,000.
A three-bedroom house in an enviable new development moments from Oxshott High Street, with secluded garden and decked area, £385,000
A two-bedroom split-level flat with stunning south-west facing roof terrace in the popular Brondesbury Conservation Area, £549,950.