MSE News: Drivers face soaring car insurance costs

dunstonh

I'll be interested to see where that figure comes from, do you have a source?

In this weeks auto express but comes from http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtran/writev/591/cmi17.htm

2.4.3 Financial Services Authority (FSA) returns show an industry combined loss ratio of 120% driven by an estimated 30,000 fraudulent accident claims in 2009. Fitch Ratings estimate that the loss ratio is currently 123% - in other words, for every £100 taken in premiums, £123 is being paid out in claims.

mikey72

dunstonh wrote: »

In this weeks auto express but comes from http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtran/writev/591/cmi17.htm

2.4.3 Financial Services Authority (FSA) returns show an industry combined loss ratio of 120% driven by an estimated 30,000 fraudulent accident claims in 2009. Fitch Ratings estimate that the loss ratio is currently 123% - in other words, for every £100 taken in premiums, £123 is being paid out in claims.

Well, I agree it says that, all the other figures look similar though.
This one states a complete loss of 120% driven by fraudulent claims, but also while saying it only adds £39 to a premium.
When we're talking £4000 for a teenager it suggests Raskazz figures are closer, or at the very least still points to profiteering from younger drivers.

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People who think they're saving £100 a year when they're spending £200 a year. People who think they're saving £500 a year when they're spending £1000 a year. Insurances prices go up and down. Insurance prices stay the same. People spend 10 hours getting alternative quotes. People spend no time at all having their policy automatically renewed. People pay monthly. People pay in a lump sum. Legal here. Breakdown there. With and without protected no claims. Some people make claims. Some people don't. Some have a bad experience. Some have a good experience.

You're paying for something you don't want to use which someone else is making you buy.

That's what makes it so emotive.

But this is the big picture.




It actually doesn't matter.

fingerbob7

I paid £280 last year, I have 9 years NCB and I'm a female in my 40's. My renewal premium from Aquote was £1200 with Aviva! An increase of 400%. I almost had a heart attack! I went online to the comparison sites and got it down to £430 with Axa, but it still seems a lot as I haven't made any claims.

MSD1970

The most Kafka-esque quote I got at my last renewal in June was for £2400, fully comp, with the car parked overnight in my back garden behind two sets of locked security gates. When I asked for a quote with it parked on the street - £2200. In the end I paid a wallet-numbing £900.

I have a few suggestions to even the playing field a bit.

Firstly, as car insurance is a legal requirement, the insurance companies have us over a barrel. If the government insists we have insurance, the government should provide it. I'm sure a scheme run via the DVLA would br possible and could be done without the need for industry profit margins to come into play.

How about insuring individual drivers rather than their car(s). Base premiums on age, experience, driving record, etc. For those who own more than one car, they can still only drive one at once. It would also make it possible to borrow other cars without the hassle (and extortianate cost) of short term, temporary insurance.

Or, set a basic premium level for insurance of say £200 per year which is then topped up to account for risk factors BUT, at the end of the year, if you have not claimed, you get the extra premiums refunded. That way if the insurance on a 17 year old with a Porsche is £5000, but he has no claims, he gets £4800 back. Simples.

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Wow. Although I like the refund idea - which has been suggested already - but otherwise...

How many people do you suppose are employed within the entire insurance industry? Are you talking about nationalisation? I think there would be some job losses...Once you centralise all insurance "run by the government" the fall-out would be horrendous. Dismantling such a massive industry would be a nightmare and, I'd dare to say, virtually impossible.

I can't see that there's anything wrong with how insurance works at the moment. Your Porsche example sucks, by the way.

triticale

MSD1970 wrote: »

Firstly, as car insurance is a legal requirement, the insurance companies have us over a barrel. If the government insists we have insurance, the government should provide it.

I'm sure a scheme run via the DVLA would br possible and could be done without the need for industry profit margins to come into play.

You are absolutely right with your first point.

However, you seem to have overlooked the unfortunate fact that the DVLA is staffed by hideous inbreds who share a braincell.:mad::rotfl:

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triticale wrote: »

However, you seem to have overlooked the unfortunate fact that the DVLA is staffed by hideous inbreds who share a braincell.:mad::rotfl:

And you're from Yorkshire, so I guess that makes you an expert?

dunstonh

I'm sure a scheme run via the DVLA would br possible and could be done without the need for industry profit margins to come into play.

In which case you would expect the premiums to go up even more. The insurance companies use cross subsidy and investment returns to keep premiums low (the market crash of 2008/9 is one of the reasons for increase). A Govt body couldnt do that. So, whilst insurance companies are currently paying out around £123 for every £100 of premium collected, the Govt body would have to increase premiums to cover that shortfall as it could not use the same cross subsidy.

raskazz

dunstonh wrote: »

In which case you would expect the premiums to go up even more. The insurance companies use cross subsidy and investment returns to keep premiums low (the market crash of 2008/9 is one of the reasons for increase). A Govt body couldnt do that. So, whilst insurance companies are currently paying out around £123 for every £100 of premium collected, the Govt body would have to increase premiums to cover that shortfall as it could not use the same cross subsidy.

The idea that Government would run the motor insurance market in a more efficient way than the private sector is absolutely laughable. The public sector proves to be incompetent, lazy and ineffecient at every turn.