Cancelling a Car Policy due to No Claims Bonus Proof not supplied, or insufficient:
Why would a no claims bonus be removed?
- If the insurer does not receive proof of the no claims bonus in the required time frame, then the discount they applied must be removed to stay on cover. The no claims bonus needs amended to 0, this will always result in an additional premium for any insurer.
- A customer may have selected/advised they have a bonus of e.g. two years but because of a fault claim, their previous insurer stepped back their bonus and they may now be back to 0 years. Customer may not have been aware this would happen when proceeding with our cover.
- Some insurers may not quote for a policy with no bonus so these cases will need to be cancelled or quoted with another insurer who does quote for 0 no claims bonus.
Cancelling a Car Policy due to an issue with the Introductory Bonus:
A car policy that has been incepted with an introductory bonus must meet the following requirements. If the requirements are not met, then the introductory bonus must either be removed or the policy may need to be cancelled:
What to look out for when validating an introductory bonus:
- Break in Cover: The cover must be consecutive years with no break in cover for more than 30 days (e.g. cannot be six months driving experience on mum’s policy then the next year 6 months driving experience on dad’s policy).
- Multiple Previous Insurers: If the driving experience is based on being a named driver on the same policy/vehicle but it has been with different insurers over the last few years, then the customer is required to get proof from the different insurers. Named driving experience does not follow you the way a no claims bonus does.
- Intro bonus – Cannot Protect: You cannot protect an intro bonus; you have to have at least five years no claims bonus earned in your own name before you can protect (except for a very small number of insurance companies that allow bonus protection at four years claims free years).
- Least Experienced Driver: An intro bonus is rated off the least experienced driver e.g. if a husband takes out a second car policy in his name and adds his wife as a second driver who has held her licence for a year, then we can only allow one year intro bonus as the wife is the least experienced driver. This helps prevent cases of fronting.
- Previous Claim – At Fault: Unlike an earned bonus, if the customer has had a fault accident, they start over from the date of the accident and the intro bonus is earned from there (on an earned bonus the bonus may be stepped back two years or none if it is protected).
- Previous Claim – Non Fault: If the customer (the named driver) is using intro bonus from a policy that has had a claim but it wasn’t the customer that had the claim, then you can still allow the intro bonus.
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Required Validation: Similar to the a proof of a no claims bonus, the proof of driving experience must include:
- The name of the customer and confirmation that they were a named driver on an insurance policy.
- The name of that policyholder and registration of the car that the customer was a named driver on.
- Policy number and insurance company the named driving experience is coming from.
- Date of inception of the policy and the expiration (if applicable as this policy can still be live unlike a earned no claims bonus where it needs to be expired to use on the new policy).
- If the intro bonus is coming from a company car, this needs to be confirmed in a letter from that insurance company or from the customer’s company (on their letterhead paper and signed) with the information above included.
- If the customer is taking out a second car policy (so their bonus is live on another policy), the customer will need to get written proof of this from that insurance company.