No claim made for car incident but premium still increased

JonBoy_SCFC

plus you shouldn't really be making assurances that you can't be certain of - withouyt having worked for most of the major insurers then you couldn't possibly know if this was true or not?!?

raskazz

JonBoy_SCFC wrote: »

plus you shouldn't really be making assurances that you can't be certain of - withouyt having worked for most of the major insurers then you couldn't possibly know if this was true or not?!?

Because I know how insurers work, I have worked for three 'major insurers', I know other people who work for other 'major insurers' and I know the issues which make it impractical.

JonBoy_SCFC

can you give us an example then please?

would have to be something fairly significant for the insurers not to cash in

JonBoy_SCFC

Dan_Thomas wrote: »

Jon,

Insurers aren't charities. They are profit organisations also. Given the choice of selling a policy with a wider profit margin, or selling one with a narrow profit margin, you'd have to be a complete dunce to go for the latter.

Yes, they will try and sell something for a higher premium if they can. This applies to any single business. I don't know what your point is, but you seem surprised by this.

I agree with much of what yuou say, I know exactly what thyey're like.

It is Raskazz, who has worked for 3 of the major UK insurers, that is telling us that they don't do this in the situation where customers change details half way through the poolicy term. Apparently in this specific siutuation, differently to other situations, they don't seek to maximise profits.

Mabe you should take up your point with him.

JonBoy_SCFC

thanks but i understand exactly what he's saying. just to clarify:
suppose a customer changes from
- he is saying that insurers don't charge any extra for mid-term changes than they would charge at the start of the policy
( his quote "I can assure you that the setting of price when facts change isn't linked to willingness to accept an extra premium" is where i come to this understanding)
-i am saying that i suspect they do (as you say, they are companies who's aim is to make money)

please correct me raskazz if the above is not what we are both saying

JonBoy_SCFC

that's what Raskazz is saying, then turns out it was you who misunderstood the point and went off on an irrelevant tangent!

Anyway, i was saying that it would be virtually impossible to know if they were doing it, and given that we know that morality and fairness comes lower down their list of priorities than making profits, i wouldn't be surprised at all if they did something underhand like this.

Raskazz was saying they didn't do this due to "issues" and i was curious what these issues were

raskazz

JonBoy_SCFC wrote: »

I agree with much of what yuou say, I know exactly what thyey're like.

It is Raskazz, who has worked for 3 of the major UK insurers, that is telling us that they don't do this in the situation where customers change details half way through the poolicy term. Apparently in this specific siutuation, differently to other situations, they don't seek to maximise profits.

Mabe you should take up your point with him.

For starters JonBoy, if you care to actually read the thread this is not a case of a mid-term adjustment. It is a case of a renewal premium changing due to a change of material facts.

Secondly, in terms of mid-term adjustments - the risk premium is calculated according to standard ratings. Any 'willingness to pay'/explicit profit maximisation element is catered for by administration fees.

It seems to me that you are labouring under the misapprehension that insurers charge different risk premiums for mid-term changes according to 'willingness to pay'. By definition, this cannot take place through changes in the risk premium as this would distort the underwriting process - the premium loading for a non-fault claim in the last year will be the same for renewals as it is for new business.

To go back to the the actual topic of the thread - the OP is at renewal. Thus no administration fee applies, and the only reason that the premium has changed from what it would otherwise be is that the material facts have changed, presenting a slightly higher risk. There is no element of 'willingness to pay' discriminatory pricing.

JonBoy_SCFC

raskazz wrote: »

For starters JonBoy, if you care to actually read the thread this is not a case of a mid-term adjustment. It is a case of a renewal premium changing due to a change of material facts.

Secondly, in terms of mid-term adjustments - the risk premium is calculated according to standard ratings. Any 'willingness to pay'/explicit profit maximisation element is catered for by administration fees.

It seems to me that you are labouring under the misapprehension that insurers charge different risk premiums for mid-term changes according to 'willingness to pay'. By definition, this cannot take place through changes in the risk premium as this would distort the underwriting process - the premium loading for a non-fault claim in the last year will be the same for renewals as it is for new business.

To go back to the the actual topic of the thread - the OP is at renewal. Thus no administration fee applies, and the only reason that the premium has changed from what it would otherwise be is that the material facts have changed, presenting a slightly higher risk. There is no element of 'willingness to pay' discriminatory pricing.

apologies in relation to this case the OP highlighted, which as you say is a renewal case.

In general for mid-term changes though, surely you can't seriously say that "Any 'willingness to pay'/explicit profit maximisation element is catered for by administration fees."

That just doesn't make sense - it's clear in all companies policy schedules what the admin charges are - they are the same for every single customer.

If you believe that the "willingness to pay" is accounted for in the admin fees, that's the same as saying that the "willingness to pay" factor is the same extent for all customers which is just daft!

JonBoy_SCFC

also i have a friend who is an actuary and he tells me that he very much doubts that your commetn below is true

"the premium loading for a non-fault claim in the last year will be the same for renewals as it is for new business."


do you really think the rate loadings for every rate variable is the same for renewals as it is for new business?????

JonBoy_SCFC

i ring my insurer at renewal time and ask them if the price they quote me is the best they can do - they say yes, and this is because the price is "based on my risk and their claims stats".

10 minutes later i check an online quote and it is £400+ cheaper.

10 minutes later again they agree to charge me £400+ less for the renewal policy i discussed with them earlier.

This to me shows you can't necessarily believe the reasons insurers give you for the premiums they charge.


Then when we change our policies half way through for whatever reason, we are charged extra premiums again. When we query this, posters from the industry tell us it's "based on my risk and their claims stats".

Why am i supposed to believe them in this situation when i know from the other that they arfen't averse to telling porky pies (or at best bending the truth) at other times??????

I have nothing to gain from posting here, ort nothing to prove, just posting my opinion like others do:money:. you may not like it, but i do so politely and it makes me wonder sometimes if there's a reason some posters don't like my alternative suggestions.....