The Car Insurance scam

This belongs to the previous article,  The Mandatory Insurance scam.

I am not sure how it is in the USA, But in Britain when you don’t have an accident or claim on your car insurance,  you get a so called “No Claim Bonus”. Which means you get one point from your insurance company for not submitting any claim during the previous year. These points can accumulate over the years. One for each no claim year.

For every no claim year bonus point, you’re supposed to get some money off of your next year’s insurance cost.  Well, that was the plan, but in reality it don’t works that way. In Britain Insurance companies like to increase your cost every upcoming year, regardless of your no claim. You have to call them and  threaten them of leaving and than they’ll might come back to last year’s cost. So in effect your insurance never gets cheaper in britain unless you switch agent.

Back to the no claim bonus points. You can also “Protect” them in Britain. Meaning if you pay extra money to your insurance company and if you have no claim, your points won’t be effected if you make a claim. (This protection cost around a $100 dollars per year) In reality in Britain don’t work that way. They’ll raise your cost of insurance anyway. Also, If you sell your car and don’t get another one for 3 months, you will loose your no claim bonus you had accumulated over the years.

The no claim bonus only effects your initial insurance cost and only applies to one car on your name. Say you have sold your car. You buy another one within 3 months, your insurance will be cheaper if you can prove you had no claim for a certain number of years. (you mark the number of years on the application form and the insurance company will ask you for proof.) Which is a letter from your previous insurance company stating how many years of no claim you have. If that proof is dated older than 3 months, your no claim bonus points become invalid.

The difference can be several hundred pounds in annual cost.

So, the scam in this is that you can protect your no claim bonus by paying extra and the insurance company supposed to ignore if you have an accident or any kinds of claim. (yeah we know what they do, so this is definitely a scam) The second part of this scam is when the time Comes for the renewal of your insurance policy for the next year, regardless if you had a claim or not, they’ll raise the cost of the insurance. And that makes it a scam.

I had not had an insurance claim as of yet but my car insurance gets more expensive every year if I leave it with the same insurer, so I have to switch insurer every year.