Change of Address Fee - Rip Off - Views Please

lisyloo

In reply to #57

But, like the insurance industry, still make record profits year on year

That isn't true of motor insurance.
I believe out of the past 15 years motor insurance has made losses for 14.
That's why they have had to put up costs.

Are you talking baout the entier insurance industry, which I think is somewhat misleading as this thread is about motor.

I'm off out for mothers day.
Have fun peeps :-))

dizzie

Hi again Lisyloo,

Well, looks like we'll have to agree to disagree on this one. I take your point about the man with cataracts perhaps not being able to drive. Ha ha, bad example, but let us just say that there are plenty of other examples - people who are not as intelligent, or those with English as a second language who may not know what an "autorenewal" meant and might find reading/understanding a lot of dense words rather difficult. The more complicated you make a policy and its charging structure, the more people you are going to confuse/catch out.

Clearly you are well educated, understand concepts such as "autorenewal" and know what sections to read to ensure that you've seen all of the potential charges. But if you have never had a policy that has used this structure (i.e. one that did not charge extra fees for change of address/cancellation/amendment and one that did not do autorenewal), would you agree that you might be ignorant that such concepts exist before you had read all of the paperwork?

I remember the first time I got a policy which was "autorenewed". On reading all of the paperwork, I saw this clause for the first time and since I like to get new quotes every year, I saw this as a bit of a "trap" and immediately rang them to opt out of autorenewal. And on this policy there were also all of the extra fees (i.e. any form of amendment and cancellation). Unfortunately, by the time I got the paperwork, the cover was already in place by 24 hours so although there is a cooling off period, I couldn't do anything about it because the cover has started.

Okay - lesson learned - I arrange my new policy at least a week in advance of the renewal date now....so that I can check paperwork thoroughly and use the "cooling off period" if necessary. PS If you pay by debit card and then on reading the paperwork (which arrives after you've paid), I'd be interested to know how quickly debit card charges are refunded if you change your mind during the cooling off period. Some people may not be able to afford to pay for a second policy before the charges from the aborted first one are refunded.

I guess one thing that this forum proves is that we all have our opinions and ideas about things. Just as to me it would have been obvious that if I had a medical condition and was taking medication, I would expect that I would need to be "cleared" to take part in certain activities where there could be an added element of risk, e.g. bungee jumping or scuba diving. Likewise, you seem to know many of the nuances of insurance policies and for you, it is obvious what sections of policy documentation you need to check (as you said you just read the important bits because you know where to find them).

For me, insurance is definitely not all about cost. As I said earlier, customer service ratings are really important for me. I remember when my husband was involved in a crash on a country road (actually, I think the other driver was the 78 year old guy with cataracts...he came round the corner in the middle of the road and my husband was about to give him some serious verbal bashings until he got out of his vehicle assisted by two walking sticks and staggered towards him!). There were no witnesses so it was knock for knock. But the other driver had real problems and after 6 weeks, his insurer was still arguing the toss and he had had no car during that time (in the interests of keeping death of the road, I had no personal objections to this, but it just goes to show that insurance companies are not all the same!):)

dizzie

lisyloo wrote: »

The choice is simple - don't give them your business. You CHOSE this insurer who doesn't make things clear to you.

Yes, I did. I chose them once at short notice (since my insurance expired in 24 hours) and by the time I got the paperwork and noticed all of the extra "Facts" buried in some dense paragraphs in the hefty paperwork, it was too late for me to cancel. So they had my business for ONE year, and one year only.



Crikey, just been thinking about DunstonH's (?) post about cross subsidy too. Funny how regulations are not always compatible with each other isn't it?

I think he said that the FSA don't like cross subsidy, but now they've outlawed gender discrimination (although gender is statistically a risk factor), this will put more "cross subsidy" into policies. Heaven help us if they ever outlaw age discrimination on insurance policies...if they do, it'll be time to get super fit and cycle the 15 miles to work!;)

lisyloo

Well, looks like we'll have to agree to disagree on this one.

I think we may too :-)
But it's always nice to debate things with polite people rather than those that have to make it personal and nasty, so I thank you for that.

I take your point about the man with cataracts perhaps not being able to drive. Ha ha, bad example, but let us just say that there are plenty of other examples

We have no disagreement.
I look after my in-laws who are 82 and 83.
My FIL drives but his near-sight is terrible so he couldn't read the large print without a magnifying glass and wouldn't understadn it anyway.
My MIL would have forgotten the first sentence by the time she got to the third.
There is no disagreement here.
But there is still no getting away from the responsibility part.
The example I alwasy go to is tyres. We would all agree that it's totally unacceptable to drive with dangerous tyres.
This is a responsibility if you want to drive.
Yes it's difficult for some arthritic people. But if you can't actually do it yourself you pay someone else (in this case a gargage).
I can't believe that anyone would disagree with me that we shoudl "let people off" their responisbility just because it's difficult and let then be dangerous.
If they can't do it they either pay someone else or give up driving simple as that.
The same applies to legal contracts.
If you can't DIY, get a borker or get the bus.

Clearly you are well educated, understand concepts such as "autorenewal" and know what sections to read to ensure that you've seen all of the potential charges.

Well I wasn't born or educated about insurance.
I simply read my policies.

would you agree that you might be ignorant that such concepts exist before you had read all of the paperwork?

Absolutely.

Just as to me it would have been obvious that if I had a medical condition and was taking medication, I would expect that I would need to be "cleared" to take part in certain activities where there could be an added element of risk

I already had a qualification that's internationally recognised (PADI) and had already done the training, exams and medical requirements and had the documentation.
I didn't know that my medical "clearance" would not be accepted at the new place but I accept that's my fault for not reading the small print.

That's all irrelevant though.
I am not arguing that there should not have been a medical or that I shouldn't have paid.
The point I was making was that what was important to me wasn't important to others hence I was saying that KEY FACTS won't work because what's important is personal, hence you have to read the documents personally and put out what's important to you. It cannot be done for you. Even brokers aren't mind readers.

it is obvious what sections of policy documentation you need to check

No it's not obvious.
They might being in new innovations I don't know about or new charging structures.
I have to go and read it.
I look at the title section to work out which bits to focus on.
But no, I don't have any built in advantage. There might be stuff that's new to me.
I have to read it like everyone else.
But like a telephone directory I wouldn't read the whole lot to find what I wanted.
I look at the sections/titles to save some time.

Yes, I did. I chose them once at short notice (since my insurance expired in 24 hours) and by the time I got the paperwork and noticed all of the extra "Facts" buried in some dense paragraphs in the hefty paperwork, it was too late for me to cancel.

You do get a 14 day cooling off period to check the paperwork.
I realise this is difficult if going on holiday etc. but otherwise it should be made a priority in those 14 days.
I realise life isn't always ideal :-) but ultimately it's your responsibility.
I don't mean to be harsh, but you do get a years notice and you can buy a diary.
You can check out quotes up to a month in advance, so no-one is forced to do it last minute and get's no notice.

mikey72

lisyloo wrote: »

In reply to #57

That isn't true of motor insurance.
I believe out of the past 15 years motor insurance has made losses for 14.
That's why they have had to put up costs.

Are you talking baout the entier insurance industry, which I think is somewhat misleading as this thread is about motor.

I'm off out for mothers day.
Have fun peeps :-))

You keep saying that. I know you like to repeat it, but post up your figures to prove it.

The only company I know of that only do car insurance is Admiral, so unless you know they are making it up, and their accountants are lieing as well, I'll go with the industry figures they published.

And don't quote cross subsidy, or just pick out underwriting, we're talking about a company that delivers car insurance to the public as a finished product, not one specific aspect of it, or expanding the product to the entire insurance business.

Admiral -The group recorded a pre-tax profit of £266m for 2010, up 23% on 2009.

dunstonh

The only company I know of that only do car insurance is Admiral, so unless you know they are making it up, and their accountants are lieing as well, I'll go with the industry figures they published.

And don't quote cross subsidy, or just pick out underwriting, we're talking about a company that delivers car insurance to the public as a finished product, not one specific aspect of it, or expanding the product to the entire insurance business.

So, what you are saying is, if you prefer to pick certain bits of the figures and disregard others?

Admiral is not just car insurance. It is the primary part but it has confused.com and ConTe.it and a number of other overseas arms. Admiral only underwrites 27.5% of its premiums. That is dropping to 25% in 2012. So, it is cherry picking the more profitable sides whilst leaving the less profitable sides to others. They even admit in their own statements that "We generate significant profits from insurance products underwritten outside the Group". So, you can't disregard that element.

There are two areas that admiral have benefitted from that others have not (copy and paste).
They operate a ‘capital-light’ business model transferring a significant proportion of our underwriting risk to reinsurance partners, which in turn allows Admiral to distribute the majority of our earnings as dividends and Extend this low risk philosophy to our investment strategy, only employing cash deposits or money market funds.

The lack of investment returns and loss on investments in 2007 through 2009 hit them less as they were not reliant on higher investment returns. They also earn £77 per vehicle insured on average through sales of ancillary products. A key income source.

Of their £275.8m profit, they made just £52 million on Underwriting profit. They made £142.4mill on Net ancillary income.

The combined ratio in 2010 was 83.5%, marginally better than the 84.9% for 2009. The improvement in expense ratio was in part offset by the slight worsening in the reported loss ratio. The latest market information available for 2009 shows a total combined ratio of 123% (Admiral’s advantage over this figure being spread relatively evenly between the loss and expense ratio elements).

mikey72

I know the figure.
I keep saying underwriting is profitable.

As you say

"Of their £275.8m profit, they made just £52 million on Underwriting profit. They made £142.4mill on Net ancillary income."

So if they had chosen to keep all underwriting in house, that means the underwriting Admiral generated would have made over £200 million.

So who's got the figures for all these "losses"?

In fact, they made something like £67 million plus from memory from commission from farming out the other 72.5%. So the other underwriters must be doing very well to afford to pay that back to Admiral.
As to why they lay off the risk on to other underwriters, instead of covering 100% themselves, would you care to post the reasons, or would you expect them to keep it all in house?

But alternatively, by your aurguement, if Admiral can run a very successful business, taking my money, giving me car insurance that satisfied the needs and requirements of the business, and can do it without making all he profits from underwriting -

why is it that car insurance have to go up because of the lack of profit in underwriting, when Admiral can make a business run with record profits year on year? When as you say, it's only £52 million out of their £275 million?
(Until you count the £67 million as well, then it's 119 million pounds profit from underwriting.)

dunstonh

So if they had chosen to keep all underwriting in house, that means the underwriting Admiral generated would have made over £200 million.

In that year, yes. However, what about a year that sees a major loss occur. They would have to suffer all the loss as well.

So who's got the figures for all these "losses"?

The industry average.

But alternatively, by your aurguement, if Admiral can run a very successful business, taking my money, giving me car insurance that satisfied the needs and requirements of the business, and can do it without making all he profits from underwriting -

why is it that car insurance have to go up because of the lack of profit in underwriting, when Admiral can make a business run with record profits year on year? When as you say, it's only £52 million out of their £275 million?
(Until you count the £67 million as well, then it's 119 million pounds profit from underwriting.)

1 - Admiral rely on cross sales of ancillary products. If they were not so good at selling add ons, they would have to make the money elsewhere
2 - Admiral are not the cheapest for most people (some maybe, but not most). Add on the ancillary products that clearly many most be buying with them, then chances are their bottom line premium is higher than others.
3 - they got lucky with the investments crash. Long term, they will probably lose out.

mikey72

dunstonh wrote: »

In that year, yes. However, what about a year that sees a major loss occur. They would have to suffer all the loss as well.

Which is why they don't keep it all in house.
So are you now saying it has been a good year, or that Admiral made that much even in a bad year?

dunstonh wrote: »

The industry average.

Not one shared by Admiral then.

dunstonh wrote: »

1 - Admiral rely on cross sales of ancillary products. If they were not so good at selling add ons, they would have to make the money elsewhere
2 - Admiral are not the cheapest for most people (some maybe, but not most). Add on the ancillary products that clearly many most be buying with them, then chances are their bottom line premium is higher than others.
3 - they got lucky with the investments crash. Long term, they will probably lose out.

1.The same products other insurers sell?

2. Not the cheapest - have a read of the posts on here asking about cheap premiums, you'll find Admiral very well recommended.

3. So they make money on underwriting, they're cheap, they're good at selling add-ons. and they invest well.

So why can no other insurer do this, but the endless chant has to be, "we're making a loss, pay us more"?
And more to the point, why are any other insurer but Admiral still here, if no-one but Admiral has actually made any money for years, and cross subsidy isn't allowed.

Dangermac

mikey72 wrote: »

Which is why they don't keep it all in house.
So are you now saying it has been a good year, or that Admiral made that much even in a bad year?



Not one shared by Admiral then.




1.The same products other insurers sell?

2. Not the cheapest - have a read of the posts on here asking about cheap premiums, you'll find Admiral very well recommended.

3. So they make money on underwriting, they're cheap, they're good at selling add-ons. and they invest well.

So why can no other insurer do this, but the endless chant has to be, "we're making a loss, pay us more"?
And more to the point, why are any other insurer but Admiral still here, if no-one but Admiral has actually made any money for years, and cross subsidy isn't allowed.

Mikey72. As you know, the insurance sector is extremely competitive. There are many providers, and I can assure you that there is no cartel.

If you accept that there is no cartel, then there would only be one reason why premiums are going up right accross the board - the cost of sale (i.e the claims costs) are increasing.

I appreciate that you would argue that black was white and vice versa and that the insurance industry is simply a licence to print money. Let me assure you that, particularly with regards to Motor Insurance, this is quite simply not the case.

End of. No ifs, no buts. No cospiracies. No cartels. Its a fact.


DM