Car Insurance

[jack123]

It's not a load of bollox at all. All insurance companies have to calculate the level of risk and ask for a premium that they think it's commensurate with that level of risk. They have access to masses of historic RTA data regarding the types of car involved, the type of driver involved, the part of the country and probably many other factors and within each factor the variations will be ranked in order of perceived risk. Obvious general things that would vary the risk would be things like make, model and bhp of car, annual mileage, driver age, experience, gender or ethnicity and whether or not they live in a city, urban or rural area before they even consider individual specifics like driving history and convictions, etc. If a car is likely to be driven by several different people, they have to assess the overall level of risk and if one of those drivers happens to be very low risk, it makes perfect sense that this could lower the premium.

Nah it's all complete cobblers. I agree certain factors should come into play when assessing risk, but some of the stuff they use is non sensical, take for example my current quote, If I add a younger female who is also a librarian then my quote will most prob go down, but if she most probably will not even drive the car, yet I would be less of a risk? Yeah rightio.

It's the same rubbish they spout with the optimal time to renew, from what they say on google you are deemed a more riskier person if you get a quote when your renewal is actually due. Load of tosh statistics no doubt manipulated to the car insurance advantage, the only statistics they should be concerned about are, have you had an accident, or any motoring offences.

 

[jack123]

Thinking of it, just realised something, with these increases on car insurance, what the hell happened to all the money saved with the whiplash cap, a few year back you would be looking at a grand plus if someone hit you, now it's around the 200 quid mark, they must have saved millions on this, yet still the customer gets stiffed.

 

[K23]

Thinking of it,

There's hope for you yet! :lol: :lol: :lol:

 

[jack123]

There's hope for you yet! :lol: :lol: :lol:

Scoff all you like, the stats you quoted, are the same stats the insurance would like to make you believe are relevant. It's a load of absolute cobblers.

As I said earlier, look at the rubbish they do with people getting a renewal quote when it's actually due. Apparently there could be hell of a difference according to google, anyone in their right mind would know that's complete nonsense. 21 days before and you can save 40% on your renewal, I don't believe that for one second.

I would love to know what studies the car insurance risk analysis twerps have done to deem someone getting their car insurance agreement 21 days before, or on the day it's actually bloody due. To deem them more riskier, lying crooks.

 

[legoman]

Jack123, I understand your irritation with this whole subject but I respectfully submit that karnataka is spot on with his comments.

My qualifications? 20+ years as a commercial motor fleet underwriter in the City market.

I'm sure you couldn't care a jot, but I promise you insurers do not make much money at all out of car insurance. You can look at the confused.com report each year based on actuarial work done by Willis Towers Watson and you will see most insurers operate at combined operating ratios (CORs) in excess of 100%. A COR is a measure of not just the claims cost as a function of nett premium earned but also includes the insurers expenses. A COR in excess of 100% means the insurer is losing money. The market survives because there is so much cash washing through it. Many investors are interested in high volume insurance business as profits may be marginal but are statistically predictable. Insurers who are lean enough can survive on slim pickings by cross selling other more profitable high volume lines such as home, travel and pet.

Insurance is a cyclical business and if the market hardens due to say a particular legally binding decision taken in court, then insurers stand to make more money.

The market has been soft for very many years, yet there are investors willing to enter the market in the hope that the hardening comes soon. This glut of providers keeps competition high and means insurers really can't price risk the way they would like as they will lose market share and hence adversely affect cashflow. It sounds ridiculous but trust me I spent years battling through the quagmire until I hung up my pen.

I'm not holding myself out to be an apologist for motor insurers but it gets my goat when people slag businesses off without being in possession of the facts. In my firm we dealt with thousands and thousands of claims every year and in excess of 97% of them were settled without question. On many occasions we continued to offer competitive renewal terms to clients who had incurred massive multimillion pound injury claims, because in the main the financial value of the claim was the random consequence of an unfortunate accident.

And that is basic tenet of insurance, that the losses of the few are paid by the premiums of the many.

 

[BrynCartwright]

Get on the price comparison websites, Bryn.

What is competitive for me might not be for you.

Da iawn Cwps...Insurance sorted and very satisfied with new price...I decided to check out a policy in just my name on 'Compare The Market' excluding my elderly Dad who hasn't even driven for 3 years. Great offers and today took out a new policy with Churchill at £283.08, and a direct Recovery Plus policy with Green Flag at £68.32.

That's a saving of £273.88 if I had done nothing and meekly renewed our old Direct Line policy, and a saving of £111.81 from what we paid last year......

I phoned Direct Line, and explained everything, and got a quote in my own name of over £816....mental considering Direct Line and Churchill is all part of the same group of companies...

 

[BrynCartwright]

Car insurance for a 90 year old will be extremely expensive. Many insurance companies won't quote for new customers over 80 but will continue to cover existing customers.

Cheers J B....took your advice, got a new policy in my name today and saved £273.88 against the Direct Line renewal and £111.81 from what we paid last year....

 

[jack123]

Jack123, I understand your irritation with this whole subject but I respectfully submit that karnataka is spot on with his comments.

My qualifications? 20+ years as a commercial motor fleet underwriter in the City market.

I'm sure you couldn't care a jot, but I promise you insurers do not make much money at all out of car insurance. You can look at the confused.com report each year based on actuarial work done by Willis Towers Watson and you will see most insurers operate at combined operating ratios (CORs) in excess of 100%. A COR is a measure of not just the claims cost as a function of nett premium earned but also includes the insurers expenses. A COR in excess of 100% means the insurer is losing money. The market survives because there is so much cash washing through it. Many investors are interested in high volume insurance business as profits may be marginal but are statistically predictable. Insurers who are lean enough can survive on slim pickings by cross selling other more profitable high volume lines such as home, travel and pet.

Insurance is a cyclical business and if the market hardens due to say a particular legally binding decision taken in court, then insurers stand to make more money.

The market has been soft for very many years, yet there are investors willing to enter the market in the hope that the hardening comes soon. This glut of providers keeps competition high and means insurers really can't price risk the way they would like as they will lose market share and hence adversely affect cashflow. It sounds ridiculous but trust me I spent years battling through the quagmire until I hung up my pen.

I'm not holding myself out to be an apologist for motor insurers but it gets my goat when people slag businesses off without being in possession of the facts. In my firm we dealt with thousands and thousands of claims every year and in excess of 97% of them were settled without question. On many occasions we continued to offer competitive renewal terms to clients who had incurred massive multimillion pound injury claims, because in the main the financial value of the claim was the random consequence of an unfortunate accident.

And that is basic tenet of insurance, that the losses of the few are paid by the premiums of the many.

Thank you for the explanation about this.

Tell me something then, years ago when people complained about the cost of car insurance, the public were told the reason for this was to do with the amount of false claims whiplash mainly, now that the law has changed and there is a cap on whiplash claims, why hasn't that saving been passed onto the customer? It's something like £200 now whiplash pay-out if somebody rear ends you, a few year back it was a grand plus, the car insurance companies must have saved millions, yet I don't see it being passed on to the customer?

 

[legoman]

Thank you for the explanation about this.

Tell me something then, years ago when people complained about the cost of car insurance, the public were told the reason for this was to do with the amount of false claims whiplash mainly, now that the law has changed and there is a cap on whiplash claims, why hasn't that saving been passed onto the customer? It's something like £200 now whiplash pay-out if somebody rear ends you, a few year back it was a grand plus, the car insurance companies must have saved millions, yet I don't see it being passed on to the customer?

I've been retired from the wonderful world of insurance for over 5 years now, and perhaps not surprisingly I haven't been keeping my finger on the pulse.

However there are 2 factors I think play in here. With whiplash, insurers were being taken to the cleaners too often by fraudulent claimants and the cost to deal with these claims was significant, and included the legal fees on both sides. Very often these costs exceeded the amounts courts were awarding. The aim of streamlining the whiplash process was to an extent to stop lining the pockets of the lawyers. There's an economic balance to be struck between the cost of fighting a claim an insurer knows to be fraudulent or simply making a rapid payment to dispose of the claim without using the law. Unfortunately the corollary of this approach is that claimants will still claim, happy in the knowledge that they will at least stand a chance of getting a small, quick payout. This can encourage more claims. Insurers have got smarter in their
investigation of claims but there is no doubting the claimant population's propensity to claim.

But what I think has had a greater impact on claims cost is simply the cost to repair a modern vehicle. Cars these days are loaded with tech and sensors linked to computers that it costs so much more to repair them compared with even a few years ago.

Insurers will argue that the cost savings in the way whiplash claims are dealt with have been passed on it's just that other costs have increased faster.

The other complication is that the UK Road Traffic legislation still requires insurers to provide cover for third party injury claims on an unlimited basis. Your average insurer does not have the financial strength to provide indemnity on this basis so has to rely on a series of reinsurance contracts in order satisfy the law. The cost of these reinsurance contracts is out of their control.

 

[jack123]

I've been retired from the wonderful world of insurance for over 5 years now, and perhaps not surprisingly I haven't been keeping my finger on the pulse.

However there are 2 factors I think play in here. With whiplash, insurers were being taken to the cleaners too often by fraudulent claimants and the cost to deal with these claims was significant, and included the legal fees on both sides. Very often these costs exceeded the amounts courts were awarding. The aim of streamlining the whiplash process was to an extent to stop lining the pockets of the lawyers. There's an economic balance to be struck between the cost of fighting a claim an insurer knows to be fraudulent or simply making a rapid payment to dispose of the claim without using the law. Unfortunately the corollary of this approach is that claimants will still claim, happy in the knowledge that they will at least stand a chance of getting a small, quick payout. This can encourage more claims. Insurers have got smarter in their
investigation of claims but there is no doubting the claimant population's propensity to claim.

But what I think has had a greater impact on claims cost is simply the cost to repair a modern vehicle. Cars these days are loaded with tech and sensors linked to computers that it costs so much more to repair them compared with even a few years ago.

Insurers will argue that the cost savings in the way whiplash claims are dealt with have been passed on it's just that other costs have increased faster.

The other complication is that the UK Road Traffic legislation still requires insurers to provide cover for third party injury claims on an unlimited basis. Your average insurer does not have the financial strength to provide indemnity on this basis so has to rely on a series of reinsurance contracts in order satisfy the law. The cost of these reinsurance contracts is out of their control.

Thanks, honestly for me and my experience when I have been rear ended, the solicitor was chosen by my insurance company, also when my car was being assessed before it was written off, I had a courtesy car from Enterprise, was a few year back now, but I actually saw the bill for the courtesy car, it was just under 3 grand cost, for less than 30 days, what I thought at the time was the insurance firms were all in on this, making money left right and centre, yet blaming Joe Public, just because some dic&head rear ended you, agreed there are criminal gangs, but my experience with insurance firms were that they were skimming as much profit as they could.

 

[legoman]

Thanks, honestly for me and my experience when I have been rear ended, the solicitor was chosen by my insurance company, also when my car was being assessed before it was written off, I had a courtesy car from Enterprise, was a few year back now, but I actually saw the bill for the courtesy car, it was just under 3 grand cost, for less than 30 days, what I thought at the time was the insurance firms were all in on this, making money left right and centre, yet blaming Joe Public, just because some dic&head rear ended you, agreed there are criminal gangs, but my experience with insurance firms were that they were skimming as much profit as they could.

Well, I probably won't ever convince you to change your mind, and you are perfectly entitled to hold your opinion.

At the end of the day though, if you look at the CORs of lots of motor insurers you will find them knocking around 100%

 

[Cooperman]

Have finally cleaned everything up in the last few days. Stayed with Tesco at £527 (including key loss protection at £22), this is up from £363 last year. Lowest alternative quote was £470, but with £600 excess!

Also initiated the claim for lost key, visited dealer to order it, paid my £399.01 and I should have it in my hands this coming week. Invoice for key posted off to Tesco, rebate expected within a week.

 

[jack123]

Have finally cleaned everything up in the last few days. Stayed with Tesco at £527 (including key loss protection at £22), this is up from £363 last year. Lowest alternative quote was £470, but with £600 excess!

Also initiated the claim for lost key, visited dealer to order it, paid my £399.01 and I should have it in my hands this coming week. Invoice for key posted off to Tesco, rebate expected within a week.

Had my renewal letter confirmation yesterday, paying monthly but it's under 400 quid, a sharp rise from previous years. but hey ho,I suppose in Wales, if we are all driving like going to a funeral, I would think insurance costs will go down? hmm we will see

 

[Cooperman]

Had my renewal letter confirmation yesterday, paying monthly but it's under 400 quid, a sharp rise from previous years. but hey ho,I suppose in Wales, if we are all driving like going to a funeral, I would think insurance costs will go down? hmm we will see

Every cloud and all that.

 

[jack123]

Every clhttps://jacothenorth.net/blog/20mph-a-disaster-unfoldsoud and all that.

Yes, that would be the logical way of thinking, but when I stop and think of the implications, I can only think of an increase in accidents, Honest to god, I am a pretty laid back person, but I do have serious doubts in that I can hold my nerve doing 20 or under on a perfectly good road and conditions.