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  • FIRST POST
    • vikinggreen
    • By vikinggreen 3rd Oct 17, 8:41 PM
    • 61Posts
    • 27Thanks
    vikinggreen
    Variation in car insurance prices depending on start date of policy?
    • #1
    • 3rd Oct 17, 8:41 PM
    Variation in car insurance prices depending on start date of policy? 3rd Oct 17 at 8:41 PM
    Just hunting down car insurance for a family member using a price comparison website.

    Entering a start date of tomorrow results in a price nearly 15% higher than a start date in 14 days time, and it's almost the same across the board for every insurer.

    Simple question: why on earth ...???
Page 1
    • ilikewatch
    • By ilikewatch 3rd Oct 17, 9:13 PM
    • 1,044 Posts
    • 1,237 Thanks
    ilikewatch
    • #2
    • 3rd Oct 17, 9:13 PM
    • #2
    • 3rd Oct 17, 9:13 PM
    Just hunting down car insurance for a family member using a price comparison website.

    Entering a start date of tomorrow results in a price nearly 15% higher than a start date in 14 days time, and it's almost the same across the board for every insurer.

    Simple question: why on earth ...???
    Originally posted by vikinggreen
    Because someone who needs insurance tomorrow could be seen as desperate and more likely to take the first quote offered? There's probably some also some risk assessment that they use that shows that people who leave things to the last minute are more likely to make a claim.
    • Aretnap
    • By Aretnap 3rd Oct 17, 9:58 PM
    • 2,843 Posts
    • 2,339 Thanks
    Aretnap
    • #3
    • 3rd Oct 17, 9:58 PM
    • #3
    • 3rd Oct 17, 9:58 PM
    Off the top of my head it could be some combination of the following...

    1 Fraud risk. If you have an accident or your car is stolen and you're uninsured there must be a temptation to buy cover for immediate start, then phone up and say"you'll never guess what's just happened". Depending on the circumstances it may not be easy for the insurer to prove that the incident took place before the policy started. If you're buying cover for two weeks hence it's much less likely that's your intention.

    2. Attitude to paperwork. If you're the sort of person who doesn't deal with your renewal until the day it's due there's a fair chance that you're also the sort of person who takes three days to tell your insurer when you have an accident. And there's little insurers hate more than people who take three days to report an accident, especially accidents involving damage to third parties - it can greatly increase their costs if the third party gets an accident management company involved before they have chance to contact him and offer to sort his repairs out themselves.

    3. General personality type. If you sort out your insurance two weeks in advance you're obviously an organised, forward thinking person. Maybe that's also reflected in your driving style.

    4. Commercial considerations. People buying insurance in a hurry are doubtless less price-sensitive than those buying weeks in advance so why shave your profit margins to give them your lowest price when you don't need to?
    • Mungo76
    • By Mungo76 4th Oct 17, 8:47 AM
    • 69 Posts
    • 27 Thanks
    Mungo76
    • #4
    • 4th Oct 17, 8:47 AM
    • #4
    • 4th Oct 17, 8:47 AM
    Simple sales, as a business if you know you have x amount coming in the next month therefore hitting your targets, keeping the cash flow going, then you are going to discount to get it.

    If you sell 4 premiums a month it's not worth it, but if you sell 4,000 or 40,000 you will discount.
    • paddyandstumpy
    • By paddyandstumpy 4th Oct 17, 8:50 AM
    • 916 Posts
    • 409 Thanks
    paddyandstumpy
    • #5
    • 4th Oct 17, 8:50 AM
    • #5
    • 4th Oct 17, 8:50 AM
    Simple sales, as a business if you know you have x amount coming in the next month therefore hitting your targets, keeping the cash flow going, then you are going to discount to get it.

    If you sell 4 premiums a month it's not worth it, but if you sell 4,000 or 40,000 you will discount.
    Originally posted by Mungo76
    Reasonable logic, but I can tell you this had nothing to do with it where I used to work.

    It's purely performance related; crashes that had just happen, cars stolen overnight, tree fell on car etc...
    • vikinggreen
    • By vikinggreen 4th Oct 17, 11:27 AM
    • 61 Posts
    • 27 Thanks
    vikinggreen
    • #6
    • 4th Oct 17, 11:27 AM
    • #6
    • 4th Oct 17, 11:27 AM
    Interesting replies, and thank you.

    It never occurred to me that people would try to insure a car that had already been damaged. I've obviously led a sheltered life!

    If anyone has a definitive answer, I'd be interested to hear it. Idle curiosity maybe, but perhaps the information might be useful to people who do need insurance at short notice for whatever legitimate reason.
    • paddyandstumpy
    • By paddyandstumpy 4th Oct 17, 11:53 AM
    • 916 Posts
    • 409 Thanks
    paddyandstumpy
    • #7
    • 4th Oct 17, 11:53 AM
    • #7
    • 4th Oct 17, 11:53 AM
    Interesting replies, and thank you.

    It never occurred to me that people would try to insure a car that had already been damaged. I've obviously led a sheltered life!

    If anyone has a definitive answer, I'd be interested to hear it. Idle curiosity maybe, but perhaps the information might be useful to people who do need insurance at short notice for whatever legitimate reason.
    Originally posted by vikinggreen
    Definitive answer for what? Aretnap's details post details exactly why insurers load rates based on the difference in quote and inception date.
    • vikinggreen
    • By vikinggreen 4th Oct 17, 4:49 PM
    • 61 Posts
    • 27 Thanks
    vikinggreen
    • #8
    • 4th Oct 17, 4:49 PM
    • #8
    • 4th Oct 17, 4:49 PM
    Definitive answer for what? Aretnap's details post details exactly why insurers load rates based on the difference in quote and inception date.
    Originally posted by paddyandstumpy
    Aretnap has posted what he speculates may be the reasons. He may well be right, but it would be helpful to know for a fact whether any or all of his thoughts are correct.
    • paddyandstumpy
    • By paddyandstumpy 4th Oct 17, 5:08 PM
    • 916 Posts
    • 409 Thanks
    paddyandstumpy
    • #9
    • 4th Oct 17, 5:08 PM
    • #9
    • 4th Oct 17, 5:08 PM
    Aretnap has posted what he speculates may be the reasons. He may well be right, but it would be helpful to know for a fact whether any or all of his thoughts are correct.
    Originally posted by vikinggreen
    The reasons are correct.

    From experience; quote lag rating is used for the reasons suggested in that post.
    • vikinggreen
    • By vikinggreen 4th Oct 17, 5:50 PM
    • 61 Posts
    • 27 Thanks
    vikinggreen
    OK, thank you. Would the same thing apply to other forms of insurance: house, travel, etc?

    Over the years I have occasionally bought insurance quite close to the renewal date, date of travel, etc, and I wonder if I've ended up paying over the odds because I am classified as "disorganised"?

    I do always compare prices, but if all those prices are inflated towards the date of commencement of the policy, then I guess I have!
    • paddyandstumpy
    • By paddyandstumpy 4th Oct 17, 7:00 PM
    • 916 Posts
    • 409 Thanks
    paddyandstumpy
    Not every insurer will use quote lag, and for those that do; they will use it to various degrees.

    15% load for 2 days between quote and inception isn't unreasonable, based on the data I've seen in the past.

    The data I've seen has been geared towards home insurance, where it's more weather and theft claim related.

    I would be surprised if it's used on travel insurance; but annual contracts like home and car most definitely.
    • vikinggreen
    • By vikinggreen 4th Oct 17, 7:25 PM
    • 61 Posts
    • 27 Thanks
    vikinggreen
    Thanks, that's very interesting and helpful. I'm also glad that it probably doesn't apply to travel insurance, because that is often a last-minute purchase for me.

    I couldn't find any information about this "short-term" price hike on MSE's main pages, so perhaps someone from the site might consider it worth a mention? There are so many other money saving tips on car insurance that were incredibly helpful that perhaps this should be flagged as well?

    However, I'm only a very occasional poster on here, so it's not for me to say what MSE should do.
    • Quentin
    • By Quentin 4th Oct 17, 8:06 PM
    • 33,521 Posts
    • 17,405 Thanks
    Quentin

    I couldn't find any information about this "short-term" price hike on MSE's main pages, so perhaps someone from the site might consider it worth a mention? There are so many other money saving tips on car insurance that were incredibly helpful that perhaps this should be flagged as well?

    However, I'm only a very occasional poster on here, so it's not for me to say what MSE should do.
    Originally posted by vikinggreen
    You read the wrong main pages.


    There is an article devoted to getting cheap car insurance (link in the quick links at the to of the page)


    See section 9 for advice on locking into a quote prior to your renewal date:


    http://www.moneysavingexpert.com/car-insurance/?_ga=2.55366379.1118203727.1506676337-696285784.1505326816#lock
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