Directline really could save you money...lol

Treadway1

Ok, so I guess the first part of this post will be a story about how happy I am with myself, and the second part a question.... So here goes...

Having seen/heard loads of the annoying Stephen Fry and Paul Merton Directline ads stating that they could save you money by going direct as they dont pay any commission to the compare sites, I decided to give it a go. My renewal with Elephant came in at £472 for TPF&T cover, which I got down to £372 on a compare website (Although strangely through elephant again), but when I checked Direct line, I got it down to £342, for comprehensive cover!!! I was chuffed. So Id definately urge people to check it out for themselves....

However, and heres the question. I only have a crappy old car, (Even though its got a big engine, hence the large-ish [rice for insurance) so thought Id check how much more I could save by going TPF&T with directline, but when I amended the cover on the summary page and clicked re calculate, it came up as £424... £80 more for less cover!!!

Does anyone know why this would be? The only thing I could think is that TPF&T is a fixed voluntary excess, whereas I had chosen £250 VE on comprehensive. I guessed that this must have pushed the lesser cover up a bit, but I thought over £80 was a bit steep! Can anyone think of any other reason for this? Or do you think it was just an computer error?

Anyway, Ill say again. Definately check out directline when re-newing....

dacouch

It often is cheaper for comprehensive on older cars than on tpf&t, basically the Insurers get a lower value of claims on comprehensive on older cars so hence the premiums are lower.

I won't bore you with the reasons why

olly300

dacouch wrote: »

It often is cheaper for comprehensive on older cars than on tpf&t, basically the Insurers get a lower value of claims on comprehensive on older cars so hence the premiums are lower.

I won't bore you with the reasons why

I'm interested please bore us.

Treadway1

olly300 wrote: »

I'm interested please bore us.

Ditto... Sounds very interesting actually.... :T

dacouch

Part of it is simple selection, basically the type of person who takes out comprehensive is in the view of a lot of Insurers in effect a better class of client.

TPF&T Policies traditionally have a lot of dodgy claims for instance the driver wraps his pride and joy arround a tree or the car needs a lot of work to be done for say an mot and realises he has lost his money as he is not covered for it. The car will often then get stolen or catch fire. The percentage of cars that are insured for TPF&T that are stolen / catch fire when compared to comprehensive policies is much higher for TPF&T policies.

TPF&T policies tend to have much higher claims for damage to other vehicles / persons than comprehensive policies.

Years ago just before the advent of the direct companies / comparison sites the industry were condsidering doing away with TPF&T and just having either Third Party Only or Comprehensive. It all got dropped when the direct companies / comparision sites came along as it turned the market upside down because the market became incredibly competitive. Companies were (and still are) driven by then goal of achieving Critical Mass, this gives them economies of scale and a good market share.

There are a lot of companies that do not even offer TPF&T and / or Third Party Only as they simply want comprehensive policyholders because of the better claims records and they are for more likely to have homes that need insuring, life insurance etc etc which the Insurers can sell them. Motor Insurance has incredibly low margins and produces large claims ratios (Percentage of value of claims against premiums taken in).They make much better margins on the other types of policies and people who have a number of different policies with the same insurers are more likely to remain loyal to the same insurer which helps the profit margins.

The other issue is some of the companies price their TPF&T high as they are not keen on attracting this type of business so they are in effect prices themselves out of the market and if they take it on they take it on at a premium they can make more money.

You will often see the MSE bods advising people who are asking advice on getting their premiums down on TPF&T policies recommending they try getting a quote for comprehensive cover because of this. Try running a quote through for your car on tpf&t and see how much the premium is, you will be very surprised. (If the value of your car is over £3000 very few companies will quote so try reducing the value to £3000 to get an example)

There are probably some other issue I have missed that hopefully other people can add.

Treadway1

Ahhhhh, very informative Dacouch, cheers.

Crafty gits these insurers... But the I guess I knew that all along!

Thanks

dacouch

Like most businesses, its all about the bottom line

carbonmonoxide

Just wanted to add I bought car insurance for the first time yesterday and had exactly the same experience with direct line. I tried all the comparison sites and the cheapest 3rd Party was coming in at around £700 but I managed to get fully comp with DL for £715.

I ended up getting a much better policy (legal cover, windscreen protection, vandalism protection) for only a few quid more with a well known insurer - although I think they may be doing some sort of offer at the moment so perhapsI got lucky there too.


Shame the insurance nearly cost the same as the car I'm buying, but there you go

little_miss_moneysaver_3

Indeed I was with direct line a year ago, could not fault them. I only left them as we got a very good multi car policy cheaply with another provider.

For my car on its own its been the cheapest quote i've ever had (OK I just turned 25). Much cheaper than any on a comparision website.

Am hoping to ring them and get a good multicar policy with them this year. See how much my renewal is from the existing company, I feel they may have some competition!

charlievwp

I search for a quote on a comparison site = £400 ish
Direct line = £530!

Looks like they're good in most cases, but not all

olly300

charlievwp wrote: »

I search for a quote on a comparison site = £400 ish
Direct line = £530!

Looks like they're good in most cases, but not all

There not good for me either so you are not the only one out there.

In fact on every type of insurance I can think of they come out as one of the top 3 most expensive companies for me for the level of cover they are offering ......