What is Driver Grade?
Calculating the price on your car insurance policy involves measuring a range of things.
A big part of pricing the policy is the driver. When you get a quote from us we ask about the number of claims you’ve had in the last five years, where you or the owner paid the excess.
This will form part of the premium price. Think of this as the Driver Grade.
How does Driver Grade work?
We ask about the last rolling five year period from today’s date. The number of claims you enter for this period determines the driver grade.
- Had no claims? Your driver grade is zero and you’re at our base rate without any loading.
- If you’ve had a claim, the grade increases to one which slightly increases the premium compared to the zero driver grade.
Each additional claim you enter increases the driver grade and premium. If you’ve had 3 claims your driver grade is 3, and you’ll be paying cumulatively more.
We aren’t worried about accidents over five years ago. We know drivers can change, and that it’s hard to remember back that far. A crash 10 years ago shouldn’t affect the premium you pay today.
What if I wasn’t at fault, but I paid my excess?
It’s common for insurance companies to only ask to disclose at-fault claims.
Instead we ask you to disclose claims where you paid the excess (regardless if you were at-fault or not). You could have a claim go towards your driver grade that wasn’t your fault (like your car being vandalised).
But don’t worry – we only apply small incremental rates so it’s not the end of the world if you’ve had a claim (or two).
Over the long term we want to price policies so that people who use their insurance policy more pay a little more for the luxury. This helps to balance out this trade-off.
What about a no claims discount?
We don’t provide a direct no claims discount. Recall that we instead have a base rate for people with no claims, and then apply small incremental increases on top of the base rate for each claim in the last five years.
Often insurance companies will attract you by offering a big no claim discount. But the moment you make a claim you lose the entire discount, and face a big hike on your next premium.
We think it’s unfair to be penalised so much for making a single claim. Our preference is not to cancel any ‘no-claims discount’ and instead apply only a small incremental increase for each time you’ve used your policy in the last five years.
This helps to keep car insurance affordable for everyone. We also think it’s a fairer and more consistent way to price policies.