MSE News: Third party car insurance could soon be dead

Former_MSE_Helen · 15 April 2011 at 3:21PM

This is the discussion thread for the following MSE News Story:

"Motoring giant the AA thinks third party cover could be a thing of the past by the middle of the decade ..."

Read the full story:
Third party car insurance could soon be dead

Arg · 15 April 2011 at 3:53PM

:rotfl:

All the more reason not to bother with insurance.
What next, mandatory breakdown,legal and hire car cover?

ILW · 15 April 2011 at 3:58PM

Premiums were harldy any different anyway.

JimmyTheWig · 15 April 2011 at 4:01PM

it is usually more expensive because insurers believe those who take it out – mostly young drivers – are more likely to claim.

I don't believe this.

I believe that this cover is generally taken out by young drivers to keep costs down and so the average third party quote will be more than the average fully comp quote.

I believe that as some providers don't do this cover (this is certainly true of third party only, rather than third party fire and theft) there is less competition and so a price comparison website could find a cheaper fully comp quote for someone than a third party only quote. (*)

But I don't believe that, with all other aspects of the quote equal, a given insurer will quote more for third party only than fully comp. And therefore it is not true to say that companies push the prices up because of who takes out the cover.

(*) Lets see an example of this. Lets consider pairs of socks.
Maybe Primark sell socks in packs of three for £3.
Maybe M&S sell socks in packs of three for £5.
Maybe M&S also sell socks in packs of two for £4.
But maybe Primark don't sell socks in packs of two.

Now, if there was a sock comparison website, a quote for two pairs would return a higher price (£4) than a quote for three pairs (£3). But this doesn't mean that shops are penalising those who want two pairs. It's just that the cheapest shop doesn't do them and so the market is restricted.

Percy1983 · 15 April 2011 at 4:08PM

I did have a couple of years on third party at first due to the small value or the car and cheaper quotes, but even then some companies where cheaper full comp than third party, but the cheapest quotes where third party.

As it is with confused.com and such like its not to hard to quickly change and have a look.

split_second · 15 April 2011 at 6:57PM

owned this car since 2004 always fully comp, am sure the car before was the same as the difference in premium was ridiculously small

Narc · 15 April 2011 at 9:21PM

I've found the difference is usually worth going for TPF&T. I'm never going to claim unless it's big stuff anyway because of what it would do to my NCB and premiums.

Another scam by the insurance companies colluding.

Premier_2 · 16 April 2011 at 10:11AM

The product will only die if there is no more demand for it.

It's not just young and/or inexperienced drivers that may find fully comp. cheaper, and I'm not going to complain that the insurers in their fight amongst themselves now offer me fully comp. cheaper than TP. I only want TPF&T, but if they offer me fully comp at a cheaper rate, why wouldn't I take it?

There will be no demand for a product if one can buy a better product for less money.

Similar thing could be said about the 1/2lb (or 250g) of butter - that could soon be dead.
I only want 1/2lb of butter as any more goes off before I get to eating it all. But in most supermarkets today I find I can buy 1lb (or 500g) of butter cheaper than the same brand of 1/2lb.
So I buy the bigger pack and throw half of it away when it goes off.

techspec · 16 April 2011 at 1:42PM

Another insurance scam.

TPFT used to be MUCH cheaper, and has served me well for 20 years.

Then a few years ago, i noticed that in some cases it was becoming as cheap to be Fully Comp - which i now am. BUT ONLY BECAUSE THEY HAVE INCREASED THIRD PARTY UP TO THE PRICE OF FULLY COMP!!!!!!

I was third party because i'm a good driver who only drives cars worth less than £1000. Therefore, the loss of no-claims and the excess means i would never bother claiming for my own car anyway - i just wanted to be covered by law and be able to pay for 3rd party claims. Whats wrong with that?

HairY · 17 April 2011 at 4:30AM

techspec is dead right. They're trying to spin it as if Comprehensive is now better value when in fact 3rd Party has just gotten worse.

Doesn't this boil down to poor risk-assessment by insurers? Surely many of the people opting for 3rd Party are just money-savers by nature and don't necessarily pose a higher risk of claim?

From what I read, what needs to happen is a crack down on greedy personal injury claims, excessive legal costs, and this EU rubbish about equal premiums for men and women needs to be thrown right out.

And another thing... since a degree of cover is a legal requirement, why are insurers allowed to negotiate deals and discounts and make them available exclusively through price comparison sites? These shenanigans undermine the integrity of both parties and just leads to a situation where the price comparison sites hold a % of the market to ransom so they can get their kickbacks. As much as us money-savers love them, this kind of affiliation is unconventional.

When premiums have risen up to 40% in a year, a broad review of what's going on here needs to be made.

lisyloo · 17 April 2011 at 9:27AM

I think the government should force insurers to make a minimum legal product available to everyone (sort of like basic bank accounts).

MSE News: Third party car insurance could soon be dead

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