MSE News: Drivers face soaring car insurance costs

p24hrsmith

The massive hikes in car insurance should have been prevented by the government. We are being asked to tighten our belts in this time of financial crisis. Yet it clear the insurance companies (most of which are part of the banking system) have no intension of tightening there’s. So there using the law to make use keep up their profits.


The insurance companies say that they have had to increase premiums because of increased claims.


Yet according to statistics both accidents and car crime are down so how come claims are up?


An import fact to know as well is if you have full NCB and have to make a claim the actual cost over the next 7 years while you earn back your NCB, based on a £2000 full premium (NOTE I haven’t add any inflation to this over the 7 years so total would be much higher) You will pay an extra £5600++. So any claim you make that comes to less than that cost the insurance company nothing and can also make them a profit. On top of that it will add to the claim stats for your area so they can up your insurance costing you and everyone else even more. Going on that it’s not really surprising that many insurance companies offer full comp cheaper is it.


The one area where costs may have gone up is compensation claims and this needs to be sorted out. How many of you out there have after a minor rear-ender claimed for whiplash injury that they didn’t really have? What’s the going rate now £2,000/£3,000. How many fraudsters get a couple of cheap cars say £200 each insure them for say £500 each (no NCB) total cost £1,400 then run one into the back of the other the lead car is full with 4 people all then claim whiplash at £2,500 per person. So the payout is £10,000 outlay £1,400 = £8,600 profit. So with a little fake ID or stolen identity how many times do you think they could get away with this in 1 year say.
I personnel think that compensation should not be paid if the injured person will make a full and complete recovery only out of pocket expenses should be covered IE loss or earnings ECT. This may seem a little unfair to innocent victims but I think it’s the only way to reduce fraud.


Soon to be introduced is continues insurance much like road tax is now unless you car is sorn it must be insured or you get an automatic fine. The governments answer to uninsured drivers; this also proves they live in cloud cuckoo land. Taking into consideration the fact that if you car is insured or not is on the police computer so if you sorn your car and still drive it, will your chances of getting caught be increased NO its ridicules waste of time that the government will waste millions of pounds on for no return.


The law requiring us to have car insurance should be done away with. Insurance companies should have to club together to cover ALL drivers with a basic 3rd party insurance. Hold on a min don’t they already do this, of sorts. If your hit by an uninsured driver you can claim for your injuries from a central insurance (I cant remember name of it off hand ) but I’m sure when I read about this the cost to each of us is £25 so we already pay to cover our bodies against uninsured injury and fully comp covers you fully anyway. OK OK I hear it, you can’t do that nobody will both insuring their cars. I say to that, do you have house insurance, Contents insurance, Life Insurance, mobile phone insurance and so on and so on and are you legally required to have any of them ???? NO but you still buy it.

The fact also is that to process an uninsured drive (efforts to catch and court processes) hugely out way the costs of any fines that are handed out. Its like taking someone to court who owes you £250 and spending £10,000 to get it back its mad. It would be cheaper for the government and ultimately use tax payers if we just paid their insurance, which of course we already do as mentioned above.


An alternative to this is a fixed price third party insurance let’s say £250 this would do far more to encourage uninsured drives to get insurance than saying if you don’t spend £3000 insuring you £325 car we will take it away and fine you £250 then put a 3 or 6 points on your license, therefore making the insurance that you couldn’t afford before MORE expensive so you can afford it even less doing NOTHING at all to help the situation. Also not everyone who drives without insurance is some layabout hooligans many are decent people who simple can not afford it or the poor and expensive public transport system. Think about it before you judge if you last your NCB could you afford the extra £1500/£2000+ a year increase??



WHAT can you do ..do what I did and write to your local MP and complain the more people complain the more chance something will get done. Its already been televised on Watch Dog and mentioned in the house of commons so complain now.

vaio

mikey72 wrote: »

How much cheaper is it for insurance for a teenager in Germany?

Don't know about Germany for kids but my brother reckons he saved a couple of hundred quid by keeping his German insurance going when he was back in the UK on an 2 year training course.

For kids, there was a straight comparison posted fairly recently between france and the uk, same car, same driver and from memory the french price was less than half the uk price (and I think france has higher accident rates than we do)

p24hrsmith

Just another point the government intends to increase the amount banks have to pay to them and many insurance companies are owned by banks you get the picture.

mikey72

vaio wrote: »

Don't know about Germany for kids but my brother reckons he saved a couple of hundred quid by keeping his German insurance going when he was back in the UK on an 2 year training course.

For kids, there was a straight comparison posted fairly recently between france and the uk, same car, same driver and from memory the french price was less than half the uk price (and I think france has higher accident rates than we do)

I did the comparison, after being told how competitive the uk insurance business was by their advocates in this forum. (I speak french but not german).
So if we actually have the safest roads, why do we need to change to a system that doesn't appear to have any benefits, and why is our insurance dearer than our eu neighbours?

vaio

any german speakers in the house?

dunstonh

So if we actually have the safest roads, why do we need to change to a system that doesn't appear to have any benefits, and why is our insurance dearer than our eu neighbours?

We have 4 times the number of whiplash claims than Germany. (todays Auto Express).

Govt should ban no win no fee claims companies. Longer term, try and bring back morals and encourage personal responsibility and respect.

mikey72

So we agree that it's whiplash then, and changing the way we learn to drive and targeting anyone under twenty five isn't the right way to change no win no fee companies then.

dunstonh

So we agree that it's whiplash then, and changing the way we learn to drive and targeting anyone under twenty five isn't the right way to change no win no fee companies then.

False whiplash claims are part of it and go towards identifying high risk areas where fraud is higher. However, the under 25s are statistically a high risk group

Insurance companies have been running at costs of £123 for every £100 of premium paid. That cannot continue. It was cross subsidy (from investment returns and other business) that covered that in the growth years but that cross subsidy is not sustainable.

Percy1983

I must say that due to amount I have paid in over the years in a bump now I would probably claim for whiplash as a method of recovering some of that money I have unduely charged... chicken and the egg...

Just remember don't hate the player... hate the game...

mikey72

dunstonh wrote: »

False whiplash claims are part of it and go towards identifying high risk areas where fraud is higher. However, the under 25s are statistically a high risk group

Insurance companies have been running at costs of £123 for every £100 of premium paid. That cannot continue. It was cross subsidy (from investment returns and other business) that covered that in the growth years but that cross subsidy is not sustainable.

I'll be interested to see where that figure comes from, do you have a source?
It disagrees with Raskazz's earlioer in this post, and he provided links to back his up.

mikey72 wrote: »

They're close enough to Admiral's so we'll use yours.

Raskazz’s figures for drivers 17 to 18.
1000 drivers at £3500 premium equals £3.5 million
Claims 36.5% at £3287 is £1.12 million paid out

Profit £2.3 million pounds from male drivers age 17 to 18 per thousand drivers.

This is the same as Raskazz’s figure that every risk is £1199.76, so for a premium of £3500, each driver is £2300 profit. As he says, that’s on the risk; there are all the other costs to pay for.
But from his figures, a male driver 36- 40 is a risk of only £124.93.

Now my premium was about £200, so a profit of £75 for the insurance company.

If they can make money on my £75 profit, why can’t they make money on a 17 year olds £2300 profit?

And these are Raskazz’s actual figures, not mine.
As he says, he can find the right figures, and he works in the industry.
I think it is definitely time that it was looked at.