What you need to know about No claim discount (Underwriting) - Part 5

The NCD does not just help to reduce your premium. It also sends a strong message to the underwriter on your profile.

If you are enjoying 50% NCD on your motor policy, what you are telling your insurer is that you have been driving without any claim in the last 5 years or more. This is an amazing feat and i can assure you every underwriter generally likes insured of such profile.

True enough, the premium collected will be substantially lesser than someone of exact profile with 0% NCD but that's not the point. Insurance is after all about pooling of risk and if an insurer can underwrite more good risk profiles than otherwise, it also means possibly lower loss ratio which translates to higher profit margin! How about that after all?

Thus, a high NCD level will help to increase your chance of having your qoute approval. This is especially true for High Value or High Performance vehicle such as Ferrari make or Subaru WRX STI. As such vehicles are not your common saloon vehicle, but comes with hefty price tag and / or high horsepower and pick up spped, generally the underwriter will prefer insured who has a proven track record of safe driving. What is the indicator they will look for then?

SHhhhh..... No Claim Discount. . .

However, i'm not saying here that NCD is the only indicator or only underwriting consideration. Well, there are many more factors that an underwriter will have to consider and look out for such as loyalty, business consideration etc. But NCD remains a strong indicator as it's proven.