Car Insurance - "We could save you up to £x.xx"

marka87uk

When car insurance adverts say something like "We could save you up to £x.xx" ... what do they mean?

I get confused.com quotes which vary in thousands... couldn't the cheapest company "save me up to £4000" (compared to the highest quote)?

Basically I've just always wondered how they get that figure...

fossman

I try these kind of sites every year and I can always find cheaper elsewhere. I think the adverts are aimed at people who don't shop round and use the same insurers every year

My insurance is due for renewal soon so I did a quote on Confused, they came back with £330 with a £250 excess.

I've done a quote on my current insurers and with the same excess it comes out at £270 and with no excess its £330.

I'm insured with Egg insurance, they also give you 0% for 12 months if you pay for the insurance with youe Egg card.

Astaroth

Basically, new customers are surveyed by external companies on what their renewal quote with company A was and how much the quote they accepted with company B was. A high average of these are taken and this allows company B to say that they save their customers on average £x

waster_2

Insurance is basically a rip off.

An article in the London Evening Standard this week said that the insurance for a Ford Focus was £350 in west London and £475 in east London. This was based upon post codes of the proposer with all other info remaining the same.

The reason given by the insurers was that there were more uninsured drivers in east London and therefore less likely to recover if in an accident.

OK, no problem with that. Except east London man works in west London and does most of his driving away from his home area. Whereas west London man (sorry could be a lady) works in east london and spends most of his mileage driving in east London. Who is therfore more likely to be in an accident with uninsured east London man? But who pays the lower premium?

Basically insurance companies come up with any old wheeze to bump up premiums, especially on renewals. Only way to make sure you get a good price is to phone around and use the internet every year before renewing.

gazhawkins

The "Save X on your motor insurance" ads apply to those folks who've been using (and being ripped off by) the same insurer for donkeys years.

For what it's worth, I got my best quote via moneysupermarket.com, having checked Lord knows how many insurers websites. Oddly, it was with Marks & Spencer of all people - and came with free RAC cover (OK - there's no such thing as a free lunch).

Richard146

Gaz, you are not wrong there. I was with Norwich Union for over 20 years and by 2004 my premium reached £655.42. for a c class mercedes. I then shopped around at the urging of a mate and went to Tesco at a cost of £267.75 (and did I feel a fool). Another friend put me on to https://www.insurewith.com which analyses thousands of prices every month and then passes you over (on-line) direct to the cheapest.

MarkyMarkD

The "save x.xx on your motor insurance" adverts are rubbish.

Just because one company says "the average customer who switches to us saves £50" (say) proves !!!!!! all, other than that people won't switch for less than (in that case) an average of £50.

ANY insurer will be cheaper for a few customers - all they need is for those customers to save an average of £50 and they can justify the claim.

Meaningless tosh.

Woby_Tide

waster wrote:

Insurance is basically a rip off.

An article in the London Evening Standard this week said that the insurance for a Ford Focus was £350 in west London and £475 in east London. This was based upon post codes of the proposer with all other info remaining the same.

The reason given by the insurers was that there were more uninsured drivers in east London and therefore less likely to recover if in an accident.

OK, no problem with that. Except east London man works in west London and does most of his driving away from his home area. Whereas west London man (sorry could be a lady) works in east london and spends most of his mileage driving in east London. Who is therfore more likely to be in an accident with uninsured east London man? But who pays the lower premium?

Basically insurance companies come up with any old wheeze to bump up premiums, especially on renewals. Only way to make sure you get a good price is to phone around and use the internet every year before renewing.

also bear in mind that a car is likely to be parked for say 12 hours overnight at the home postcide, if car crime figures differ then taht will also have a big bearing along with the uninsured drivers quandary.

Maybe park the car in West London near to work and catch the tube across to it?!? problem solved on both fronts

Astaroth

waster wrote:

Insurance is basically a rip off.

Given that the motor insurance industry as a whole is currently making significant losses rather than profits I am not sure how you think it is a rip off.

waster_2

Astaroth wrote:

Given that the motor insurance industry as a whole is currently making significant losses rather than profits I am not sure how you think it is a rip off.

It's making losses because of uninsured drivers. Insured drivers then have to claim on their own insurance even though the other party would be liable.

Instead of the insurance companies trying to ensure that this problem of uninsured motorists is remedied they charge higher premiums to the rest of us. I think a figure of £50 per policy is touted about?

Additionally, because they cannot rate risk on a more proportionate basis the higher risk drivers pay less in ratio to the lower risk. As there are more lower risk, this = rip off. QED!

Astaroth

It is up to individual insurers to decide the mix that they want to make up their common pool and therefore price their policies -v- risk accordingly - there is no reason why they cant heavily load against high risk drivers (there is a number of insurers that only insure "safe drivers" and massively load against any negative rating criteria).

The industry is making losses because there are too many insurers trying to gain large customer bases rather than profits - the idea of cause being that when the market becomes more favourable they will cash in on their large pool of customers. See in the press that NU has reported losses of £33,000,000 from their motor book this year with them paying out £1.05 for every £1 they receive in.

In addition to this the average claim is going up at somewhere in the region of 6% per year (mainly due to increasing numbers of personal injury claims and other ancileray companies setting up to "help" people get what they are entitled to) where as premium inflation is in the region of 2-3%

Certainly uninsured drivers do increase the cost of insurance for everyone else as there is the combination of people having to claim off their own insurance rather than the third party but more importantly in terms of cost is that of running the MIB that pays out on injury cases for those in volved in accidents with both uninsured drivers and hit and runs - this is paid for by all UK motor insurers. I too have seen the £50 figure quoted and whilst I havent seen the basis for the calculation it does seem very inflated - due to the fact that my employers are a group of insurers with some costs coming from a central fund and others coming from within the individual brands it would be very difficult to try and work out the cost per policy per brand but the one attempt at it that I did see gave a much lower figure.