MSE News: Drivers face soaring car insurance costs

Percy1983

Arg wrote: »

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.

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?

Its wrong to judge my ethnicity... but of course its fine to judge by age or gender... oh wait...

It would be racist to charge more because of race, yet its not sexist to charge more due to gender...

dacouch

JamesEv wrote: »

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

Ring the receptionist and ask who the name of the person who is likely to be in charge of it (They may call it campaigns). Then either write to them or leave it until the next day and chance your arm at ringing and asking for them to give them a brief overview and suggest meeting up

Edit this link may help you http://www.abi.org.uk/Media/Releases/2010/10/Public_backs_call_for_minimum_one_year_learning_period_for_young_drivers.aspx

Althepal_2

I'm just about to renew my car insurance and have managed to get it down to a reaonsalbe figure (£480) but this doesn't include persoanl accident and legal fees within it - they cost an additional £40 for the 2. My current insurance included them as standard.
Are they worth paying the extra for? can I get them seperately and cheaper?
Any advice gratefully received.

raskazz

Arg wrote: »

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.

Which countries in particular?

Arg wrote: »

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?

Because there is no statistical evidence of any correlation between ethicity and motor risk, therefore to attempt to use ethnicity as a basis for differential terms/premiums would be a breach of the Race Relations Act.

It is perfectly legal under the Equality Act to use age as a basis for differential terms/premiums in motor insurance as the differential can be justified by strong statistical evidence.

Likewise it is perfectly legal under the Sex Discrimination Act to use gender as a basis for differential terms/premiums in motor insurance as the differential can be justified by strong statistical evidence.

raskazz

Percy1983 wrote: »

It would be racist to charge more because of race, yet its not sexist to charge more due to gender...

No, that is not the point at all. It is a question of evidence, as per my post above. There is no evidence that ethnicity and motor risk are correlated.

raskazz

harryhound wrote: »

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 ?

Thank you - that was exactly the point I was trying to make to Mikey72 in post 90 (and 92). Premiums minus claims payments does not equal profit. What does equal underwriting profit is premiums minus IPT minus commission minus reinsurance costs (much greater for books of business with young drivers) minus operating expenses minus the actual costs of processing claims (which is higher on average for young drivers as (i) they have more claims and (ii) their claims tend to be more severe, involving personal injury and third party credit hire, which requires far more lengthy processing, and far more skilled - and thus more expensive - staff, not least from the legal side which as we all know never comes cheap).

Dan_Smith

I think some people have completely missed the point on sex discrimination..

The problem I have with premiums based on your sex is that most insurers assume that EVERY woman driver is a safer risk than men.

For example I could be claim free for years and yet a woman driver with the same experience, car, occupation, etc as me BUT she has an at fault claim can still end up paying less than me! Fair? I think not!

Premiums should be based more on driving experience (mainly how many at fault claims you've made) and not whether you have a penis!

As for age discrimination I agree insurers have a right to charge more here, due to the fact young drivers are OVERALL (whether male or female) are a higher risk than older drivers. Also with age (and driving experience) your premiums can drop eventually which seems fair.

Punish the bad drivers who have many at fault claims, reward the claim free drivers regardless of sex!

Percy1983

raskazz wrote: »

No, that is not the point at all. It is a question of evidence, as per my post above. There is no evidence that ethnicity and motor risk are correlated.

So would it be racist or them to start collecting data so it can effect the future?

As I said before why not measure how tall people as well, if theres a pattern charge for it.

How about inside leg measurement, charge for it.

Yes there may sound silly, but both could potentially effect a drivers ability so why not, if you are going to say I am the same as all other 27 years old males why not say I am the same as all with the same height and leg measurement as well?

Richmc

Just spent the time to read through this topic, Do any of you guys and gals who have ideas like restricted power cars for youngsters and only one passenger etc. honestly think this type of scheme can be policed, our cops can't even stop drivers using mobile phones.
There is only one way to stop uninsured drivers, HUGH fines and long jail terms, crushed cars, full restitution for victims and instant deportation for non UK nationals committing crime.
And does anyone honestly think that an uninsured driver given a slap and a ban won't go out and get another car and start driving it straight away. I'm in favour of the victim culture as long as the police/parliament can't or won’t use justified draconian measures to stamp out these scumbags.
I'm privileged to own a powerful and sporty car, some older examples of witch are selling for sub £5000, young scr*tes are buying them up finding the insurance costs in excess of £4000 and not bothering to get insured, guess what this is doing to the insurance premiums for the rest of us?

raskazz

Dan_Smith wrote: »

Premiums should be based more on driving experience (mainly how many at fault claims you've made) and not whether you have a penis!

Er, premiums are based more on driving experience than gender. The difference between 0 NCD and 9+ years NCD is approximately a 65% reduction in the rate, all other things being equal. The difference between the rate for a male and a female driver will normally be much less than 65%, apart from perhaps in the very young driver market.

Dan_Smith wrote: »

The problem I have with premiums based on your sex is that most insurers assume that EVERY woman driver is a safer risk than men.

Firstly, no they don't, as I pointed out earlier in the thread. For middle-aged and elderly drivers many insurers charge lower rates to males than females (all other things being equal).

Secondly, you don't seem to understand how insurance works. It works by statistics. Most insurers will use at least 20 factors to arrive at a motor insurance premium. Say, for drivers under 30 years of age, if all the 19 others factors are all equal, the statistical evidence at insurer's disposal shows with a very high degree of confidence that the female driver will be a lower risk than the male driver. As such, why would it be unfair in that case to charge the male driver a higher premium? If any insurer tried to eliminate any differentiation between males and females, the rates for young females would be too high and they would not sell many policies for that segment, whereas rates for males would be too low and they would sell too many policies to young males at rates which were too cheap to make a profit.