New rules on Protected No Claims Discount

There is a new order which comes into force on the 1st August 2016 known as the CMA Order (Competitions & Markets Authority) which relates to Private Motor Insurance.

The order applies to private car policies in the name of an individual which are used primarily for Social, Domestic & Pleasure purposes (it excludes motorcycles, motor caravans and any vehicle over 3.5tonnes)

The Act states that the following information must be provided:

  • A warning that protecting your no claims discount does not guarantee premiums will not increase following a claim.  Details of the insurers ‘step back’ table needs to be provided
  • A table which shows the number of years no claims discount a policyholder has earned, and the effect on those years if a claim is made, both with and without Protection
  • An additional table showing the average  percentage that each year of no claims discounts equates to on the insurers scale.  This way you are able to estimate in monetary terms any change to your no claims discount years
  • The implied cost of purchasing no claims discount protection – i.e. the difference in cost between including or not including no claims discount protection.

Full details will be provided verbally and/or in writing for all new policies and renewals quoted or invited after 1st August 2016

 

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