Confessions of a car insurance salesman

Q: Not debating that younger people cause more crashes, but why are insurance companies exempt from discrimination laws?

SA: Because there wouldn't be an insurance industry if age discrimination laws applied to them. Otherwise people celebrating their 100th birthday would be able to buy life insurance for the next 25 years at the same cost as a 21-year-old.

Q: Why does it make such a huge difference describing your occupation in a different way? For example, if you describe a job as 'account manager', it's loads cheaper than if it's described as 'sales' or 'office staff' – all of which are technically correct…

A: It comes down to claims statistics. All other details remaining the same, bricklayers are likely to be more costly to an insurer than midwives. This can be good for the consumer, though; many jobs can be described in a few different ways, so you can pick the cheapest that matches yours, without bending the truth.

No claims discount (NCD)

Q: Is protected no claims discount (NCD) worth paying for?

A: Yes, this is generally worth paying for, in my opinion. Protected NCB means you protect the percentage discount off the base premium should you have a fault claim.

As an example – maximum (nine years' NCB) will be 65% with insurer X. If you have a fault claim (including hit whilst parked and no third-party details etc), that nine years' NCD will be knocked back to four years, meaning you only get a 30% discount with insurer X. So paying anything from a few quid to £40-£50 a year would be worth it for most people.

Q: Why can't I have a household policy on the car rather than the person and it covers any driver, like in many other countries?

SA: You can get them, but they are expensive, relatively speaking. Being expensive gets you nowhere near the top of the comparison sites, so people won't bother to put them on there as it costs too much. This means they are difficult to find.

Q: Do all companies rank NCD differently? Direct Line only goes 0-9 years, while others offer a 15 or 20-year achievable discount. And some are less.

A: Each year of NCD will correspond with a percentage discount off your base premium. Each insurer will have a slightly different percentage discount for the corresponding number of years' NCB.

With the vast majority of insurers, the maximum percentage discount you will benefit from is from nine years' NCD, which typically will grant you a 50-70% discount depending on insurer. This is the case even if the insurer states you have 10 or more years; NCD; you usually won't benefit from any additional price reduction after nine years. One notable exception to this is Axa, which I believe gives you a very small further discount for each year after nine up until 20. Another is Aviva, which I believe doesn't give any further discount for more than five years' NCD.

Claims

Q: Someone crashes into me. It's not my fault and they accept it's theirs. Who should I contact? My insurer, their insurer or an accident/claims management company?

A: In the event of a non-fault incident where the third-party insurer has accepted liability, I would advise claiming for your vehicle damage and replacement car through the third-party insurer directly. If you have a genuine injury claim, or any other uninsured losses, I would usually claim through the third-party insurer for these also. Not through your own insurer, not through any accident management company. It may still be wise to inform your own insurer of the incident for notification purposes only.

Why?

If you claim through any company other than the third-party insurer, the costs of the claim will be inflated significantly. Unless you get a courtesy car from the repairing garage directly, you will be placed in credit hire if you need a replacement car. In short, credit hire means the daily rate of hire is far higher than the actual cost. This increases premiums for everyone.

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