I was looking through my home, business and motor insurance policy and realised that only motor insurers employ "No Claims Discount". I was just wondering why "No Claims Discount" is unique to motor policies? Is it because of the prevalence of motor fraud and the difficulty in catching fraudsters hence insurers offer "No Claims Discount" to mitigate it?


Some people are better drivers than others.

A collision can happen to anybody, even good drivers. The collision might not be your fault at all; it might be entirely the fault of the other party. However, the best drivers do a better job of avoiding collisions in situations where the other drivers on the road are doing the wrong things.

The "no claims discount" is a way to identify and reward those good drivers, as they have a lower likelihood of claims in the future.

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    The same could be said about business E&O or malpractice coverage. The specific behavior of the insured carries a big weight on claim likelihood. – quid Mar 31 '17 at 18:17

Discounting premiums based on some past history is not unique to auto policies. Other insurers will discount premiums based on past claims history they just don't shout about it as a marketing means to attract customers. Life insurance is underwritten based on your health history; if you want to consider your "preferred" underwriting status based on your clear health history a "discount based on your healthy habits" you're free to do so. All sorts of lines of insurance use all sorts of things to determine an underwriting classes. The fact that auto insurers trumpet specific discounts does not mean the same net effect is not available on other lines of coverage.

Most states require auto rates and discounts to be filed and approved with some state regulator, some regulatory bodies even require that certain discounts exist. You could likely negotiate with your business insurance underwriters about a better rate and if the underwriters saw fit they could give you a discount. Auto insurers can offer discounts but are generally beholden to whatever rate sheet is on file with the applicable regulatory body.

For the person who downvoted, here's a link to a spreadsheet outlining one of the CA department of insurance allowable rating factor sheets related to auto insurance.

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