Zero Claims or UBI: Who’s the Better Driver?

I wrote an article last week about how LexisNexis has created a database for insurers in the UK that automates the “no-claims discount” system of automobile coverage across the pond. Apparently, motorists in the UK have been known to exaggerate their driving record when applying for insurance coverage with a new carrier. Imagine that.

Delving deeper into the article, it seems that drivers with zero claims on their record for an extended period of time can earn significant discounts on their premiums. A driver with no claims over the previous five years can earn as much as 75 percent off the typical premium.

My question is a simple one: How expensive is automobile insurance in the UK that someone with a good driving record can earn a 75 percent discount? I’m guessing the answer is: Pretty darn expensive.

I know Nationwide has a “vanishing deductible” program for good drivers, but lower deductibles don’t thrill me nearly as much as lower premiums.

Why do we need usage-based insurance to tell us who the good drivers are when we can have a no-claim discount?  Frankly, I could care less how hard my fellow motorists hit their brakes as long as they don’t hit my car.

That kind of braking data may make someone a higher risk, but the proof is in the pudding (although I’m not exactly sure what that means). Someone who doesn’t cause damage to his or her car or any other cars is the winner of this blog’s Superior Driver Contest.

The pressure must really be on UK motorists involved in automobile collisions to prove it was the other guy’s fault. With one little flick of the knob on the dashboard stereo—and the inattention to the road that comes with such a move—your insurance premium could jump 75 percent. That’s not something I want to come home and explain to my lovely wife.

About the Author
Robert Regis Hyle, PropertyCasualty360.com

Robert Regis Hyle, PropertyCasualty360.com

Robert Regis Hyle is editor-in-chief of Tech Decisions magazine and technology channel editor for PropertyCasualty360.com. He has spent over three decades as a journalist for a variety of business and regional news publications including a stint with a weekly newspaper that he owned and operated. He has been with Tech Decisions since the magazine’s inception in 1999 and has written articles on virtually every issue and trend facing insurance IT professionals. Prior to joining Tech Decisions, he spent two years as editor of a sister publication, The Ohio Underwriter, where he covered insurance topics for the agency and carrier markets. He has spoken on insurance technology issues at various industry conferences such as IASA and ACORD LOMA and on a number of web seminars. He is a graduate of Xavier University in Cincinnati with a degree in Communication Arts. Hyle may be reached at rhyle@sbmedia.com

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