Motor Insurance bond !

mikemoss

I saw on watchdog tv show about motor insurance going up! The price it seems are getting very silly! I remember being told about an insurance bond, this was going back a few years and I don't know if this is still possible.

But apparently a person was able to put down a large sum of money, as a bond and you did not need to purchase motor insursnce. If you had a bump etc, the damages would be paid out of the bond that had been placed!

Just wondering, does anybody know anyting about this subject. How much bond is required, how does one go about placing a bond etc etc !!

Lum

It's something like quarter of a million pounds, or in that order of magnitude.

If you have that much spare cash floating around you wouldn't be moaning about the cost of insuring your car.

iolanthe07

You can deposit a sum of money with the High Court - back in the 1960's it was £25,000, so could well be more than a quarter of a million now. Even that much would not be enough to cover a really serious injury claim.

Gloomendoom

mikemoss wrote: »

Just wondering, does anybody know anyting about this subject. How much bond is required, how does one go about placing a bond etc etc !!

It is a method sometimes used by companies with large assets. IIRC when I was a member of the Rover Group car scheme, that was the method Rover used to insure their company cars.

Hammyman

Same as a couple of companies I've driven for. The sum was six figures and certainly more than you'd pay in premiums in your entire life.

vikingaero

I believe the last figure I was aware of was a bond of £500k lodged with the High Court. Companies that use bonds often have to meet solvency requirements. Utilities, bus companies etc all use bonds and pay out low claims themselves - it used to be that the worst companies to claim off were us companies who would do everything and anything to delay paying out even for minor claims.

But even bonded companies use Insurers for higher claims.

mikemoss

WOW I thought it would be expensive, but I did not realise just how much so!! I will continue to pay my insurance the normal way then lol !

Thanks for the replies :cool:

rev_henry

vikingaero wrote: »

I believe the last figure I was aware of was a bond of £500k lodged with the High Court. Companies that use bonds often have to meet solvency requirements. Utilities, bus companies etc all use bonds and pay out low claims themselves - it used to be that the worst companies to claim off were us companies who would do everything and anything to delay paying out even for minor claims.

But even bonded companies use Insurers for higher claims.

I looked into it whilst aimlessly browsing a bit ago and found £500k as well. How much did you think it would be OP?! Considering how expensive some cars are today...
I think if I had the money I'd do it, just so the insurance companies didn't get any of my money.

Lum

Isn't it the case that if you post it as a bond you don't get access to that money, therefore it wouldn't be earning any interest or contributing to your portfolio of investments.

Therefore most of the time (not now, obviously) it would be more cost effective to invest it and pay insurance normally, unless you had an awful lot of cars.

paddedjohn

Not really because the only people who would use this system would be the well off who own a collection high end motors ferrari's, rollers, lamborgini's etc and large companies with a good few company cars.
Dont forget, if there are no claims at the end of a year, you have saved yourself a packet on premiums whilst still retaining your bond so ineffect the interest earned would be the amount saved on premiums. each car in a collection could be 10's of thousands each year so a substantial saving could be made. obvously its risky as if a claim is made it could wipe the bond out

dacouch

paddedjohn wrote: »

Not really because the only people who would use this system would be the well off who own a collection high end motors ferrari's, rollers, lamborgini's etc and large companies with a good few company cars.
Dont forget, if there are no claims at the end of a year, you have saved yourself a packet on premiums whilst still retaining your bond so ineffect the interest earned would be the amount saved on premiums. each car in a collection could be 10's of thousands each year so a substantial saving could be made. obvously its risky as if a claim is made it could wipe the bond out

For someone with that sort of collection the premiums would not be tens of thousands of pounds for each car unless they had a very very bad claims / convictions history