MSE News: Drivers face soaring car insurance costs

harryhound

As insurance is one of the industries where this country still manages to pay its way in the world, I am uplifted to read the general level of intellectual debate in this thread. It is a pity that both Lloyds, the insurance club using rich peoples pledges as its capital, and our banking industry got caught up in a spiral of re-insurance games based on pass-the-parcel.

I have just got five observations/questions:

1. A new driver in their teens has no form he/she must by definition be a higher risk, just because of the uncertainty.
[I have two children now aged about 30. As far as I know my son has never had an accident; my daughter has written off 2 cars and had several shunts - I look at myself in the shaving mirror and I still cannot explain why there is such a difference - perhaps it is something to do with daughter being the second child and two years younger than her brother?]

2. As well as the actual payout by an insurance company, nobody seems to be adding in the internal costs to the insurance company of every incident. What proportion of premiums is paid out in claims? Would 50% be a working figure? (The rest going into administration and profit?). Perhaps we need to double the suggested costs of teenage accidents ?

3. Am I right in thinking that bald ethnicity questions are illegal? (Eg what is the nationality of your father? Your mother? and the colour of your skin?) About 25 -30 years ago, Fiat ran a series of adverts, desperate to get away from their image of producing unreliable 1970's rust buckets, flashly designed by fridge salesmen; against a background of opera music and ranks of robots building a car body, a soothing voice-over droned on about "design, engineering, testing......... built by robots" then a TV satire programme took the advertising film and added its own clip to the end. This addition showed a hansom Italian driving his new car off the end of the production line; gunning the engine out of the factory gates down to the roundabout, where he collided with another vehicle and both flew to pieces, while the voice over added "......and driven by Italians".

4. An insurance company last paid out on an accident I was involved in when I was 20; I have been involved in a few scrapes since but up to now have sorted things out driver to driver. Unfortunately, "no win no fee" legal claims, coupled to access to numberplate recognition, has spawned a parasitic industry that is able to bypass the driver and claim directly off the insurance company. No longer is an accident a situation where both drivers are motivated to mitigate the damage and minimise the disruption; it has become a duel between two drivers and their seconds in the form of a lawyer and an insurance company playing a game where the actual physical damage might be a small percentage of the costs swirling about.

5. I've just been comparing my 08/09 tax calculation with 09/10.
No debate about who is paying for this recession - frugal pensioners.
Similarly the returns to insurance companies on all that they are forced to keep in reserve, following insurance bankruptcy scandal, must be looking equally sick.
https://forums.moneysavingexpert.com/discussion/comment/4619759#Comment_4619759

Mark_Hewitt

Martin was funny on Watchdog last night, but not nearly as funny as the scared look on Ann Robinsons face!

The film was a bit daft anyway, "Oh my renewal price was really high", news for you! Renewal prices are ALWAYS high! Loyalty is punished severely, Martin has been saying this for years but people still don't get it.

dunstonh

Renewal prices are ALWAYS high! Loyalty is punished severely

No its not. Those companies that tend to offer higher year 1/2 discounts tend to see the premiums rise as the discounts are removed. However, many companies are fairly steady on price. I have only changed my car insurer once in the last 7 years as the price was stable and competitive.

dacouch

Mark_Hewitt wrote: »

Martin was funny on Watchdog last night, but not nearly as funny as the scared look on Ann Robinsons face!

The film was a bit daft anyway, "Oh my renewal price was really high", news for you! Renewal prices are ALWAYS high! Loyalty is punished severely, Martin has been saying this for years but people still don't get it.

I thought she only had one look for her face

JamesEv_2

Some really good points being raised here! I’d like to throw something into the mix for your thoughts, if I may?

I work for a company that have just launched a revolutionary new way of learning to drive called Drive iQ PRO – the idea is to teach far beyond the required test standard in roughly the same amount of time as it would take to get through a test (30-40 hours on average). We’ve bolted on some post-test coaching on motorway and night driving, plus a few hours of online coursework which also serves as Theory and Hazard Perception test revision.

It only launched last month, but our pilot project saw a doubling of first time pass rates against the national average and a massive reduction in claims. Off the back of this we have negotiated a fixed ratecard with a UK underwriter that rewards Drive iQ PRO students and graduates with significantly cheaper insurance. The average saving is about £400-£600 but only yesterday I spoke to a father who had saved over £2,700 on his son’s first year’s insurance!

The course replaces the conventional way of learning to drive and can only be delivered by a Drive iQ PRO coach (an instructor who has undergone specialist training). We have over 1,200 currently trained and the AA recently signed-up to adopt Drive iQ PRO and train their instructors to be able to deliver it. The course is accredited by EdExcel and everyone who goes through it will automatically receive a BTEC Level 2 Award in Driving Science.

It costs £150 to enrol (to cover EdExcel certification, training and monitoring of coaches and development of the online coursework). More information and examples of the insurance savings can be found on the drive iq website.

We DON’T believe in restricting new drivers using black box technology. If you learn to drive rather than learn how to just pass a test, then you solve two big problems – 1) young drivers crashing 2) crippling insurance premiums.

For more info visit the driveiq website or call the office 01483 604010. I’ll happily answer any questions you may have

dacouch

The training sounds like a good idea

Shame the Insurer is Markstudy as they are what we call in the industry "Not all that"

P.S You have no address on your website which is a big no no

JamesEv_2

Thanks for your feedback. The site has just been developed and we've yet to get a proper contact page. There's no secret though, we're based at Ramsden Grange in Godalming, Surrey. I'll drop an email to IT now and ask them to make it a priority.

I guess you're in the insurance business - must admit that I've found Markerstudy really good to work with so far. All the underwriters we went to with this said they either weren't interested in young drivers or just didn't get that better training reduces the number of claims. Markerstudy have really put their money where their mouth is and will, I'm sure, reap the rewards!

dacouch

Their cover is not great and they are not great on claims in my experience however they are good at putting schemes together as you have found.

You should get in contact with the ABI as they may be interested in your scheme and will have the contacts to push it forward

JamesEv_2

That's a great idea - thanks! Is there anyone specifically within the ABI that I should write to?

Arg

raskazz wrote: »

So in other words, you suggest abolishing system A despite having no idea whether there is any better system, say system B, to replace it? Odd.

I'm sure you can imagine plenty of changes to the way things are currently done so it doesn't matter what I suggest but for the sake of the argument you could just look how other countries deal with insurance.

You need to re-read the thread. You appear to have fallen into the classic trap of using 'discrimination' in the perjorative sense of the word, which is not relevant to this discussion.

Let's pretend I said something other than discrimination. The insurance industry use a lot of catagories to come to a decision, so why not ethnicity?