BEWARE Increased premium after NO FAULT accident

Spiderham

malc_b wrote: »

Perhaps the Oracle is correct and for reasons the underwriters do not understand if A has a no-fault claim then another claim is more likely. So why do insurers not wonder why this is the case?

Well if a certain area has a lot of claims that may well not be down to bad drivers per se. Busier roads mean a short lapse in concentration is more likely to lead to an accident which causes a claim. I have seen stats showing people with a non-fault claim are more likely to have a fault claim than those who haven't. Obviously as these are confidential and commercially sensitive I can't divulge much on them. Indeed if insurers did share this information they could be accused of price fixing and operating a cartel.

If you've had a non-fault claim it means you are more likely to be driving in areas where accidents happen. If hit by uninsured driver the insurer will have to deal with it costing them money or if liability is disputed it can lead to costs also so insurers raise rates to protect against this in some circumstances.

malc_b

Spiderham wrote: »

If you've had a non-fault claim it means you are more likely to be driving in areas where accidents happen. If hit by uninsured driver the insurer will have to deal with it costing them money or if liability is disputed it can lead to costs also so insurers raise rates to protect against this in some circumstances.

Surely the first part is covered twice. The insurance rate already takes into account where you live, so already you pay more if you live in an area where accidents happen more often. You then pay more if you're unlucky enough to be in one.

Similarly if insurers are trying to recover the costs of dealing with a claim then they are being paid twice. Basic insurance should include the staff and office overheads. Or if that doesn't suit farm it out ot a claims recovery company and then they will charge the other side (not that I think that is sensible as it just puts up the total cost).

I still can't see a reason for a no-fault claim increasing the risk of another accident unless that person is involved in on-going fraud. The majority of drivers would take more care after an accident not less. If someone has just slammed into the back of me at a junction then every time at that junction I'm going to brake earlier and reduce speed more slowly to give the idiots behind time to stop. Accidents are a PITA even if no-fault. And whiplash is painful. Only some one making a living out of it would happily carry on getting bumped.

But then insurance companies probably are than concerned with fraud as long as they can keep raising the price to keep profits up.

Spiderham

malc_b wrote: »

I still can't see a reason for a no-fault claim increasing the risk of another accident

Insurers obviously can though and if they can find a good way of discriminating they will use it as it means they can charge people a premium more reflective of the risk. By increasing it for those who have had a non-fault claim it would allow them to be a bit cheaper on those who haven't had claims and hopefully win more of that business.

malc_b wrote: »

But then insurance companies probably are than concerned with fraud as long as they can keep raising the price to keep profits up.

Insurers have been paying out far more than they have been taking in premiums for the last few years so it is not a case of "keeping profits up."

Also if it was a case of the insurers being profitable and raising premiums for no reason following non-fault claim this would leave opportunity for another insurer to come in cheaper and win the business which would not be economical.

malc_b

Spiderham wrote: »

Insurers obviously can though and if they can find a good way of discriminating they will use it as it means they can charge people a premium more reflective of the risk.

I'm sorry I can accept any thing as "fact" when you cannot provide a reason for it. There are plenty of things statistics are meant to show as fact which turn out not to be the case (leukaemia hot spots for example apparently random some times clumps AFAIR). Unless you can have a mechanism to support the fact then I don't consider it justified. I've provide a possible mechanism, fraud. If that is the mechanism then what that means is that insurers are lumping the unlucky and the criminal together and averaging the risk to balance things. That is hardly the right way to conduct business.

I know when I buy in a supermarket part of the cost is due to losses from shop-lifting but that cost if spread fairly over everyone and the supermarket takes steps to stop shop-lifting. Apply the insurance rule they would just charge all teenagers more as they are in the group that shop-lifts (my apologies for stereotyping all teenagers).

The only sensible advice is always shop around, even with your current insurer since "new" policies are often cheaper in my experience.

Spiderham

malc_b wrote: »

The only sensible advice is always shop around, even with your current insurer since "new" policies are often cheaper in my experience.

Everyone is at liberty to shop around at it does male sense to be with the insurer that offers you the best deal, not going to argue there.

I do see your point here but all of insurance pricing is based on correlations, what you seem to be suggesting is that correlations should be ignored unless a sociological reason for it can be linked to it.

When it comes to pricing none of the things which cause price variation can be proved, so that means by your argument taken to its extreme conclusion everyone should be charged the same premium. I know this sounds facetious but it isn't, even fault claims could be argued to be unlucky.

You're making a comparison with supermarket costs. Now the majority of a price is based on the wholesale cost and employee salaries (cost of acquisition and distribution respectively). There are costs owing to shoplifting et cetera but these are built in. Fraud in insurance is analogous to the shoplifting, however cost of claims is also analogous to the wholesale price, so previous claims experience even if reasons can't be explained do make sense as a rating model.

When does the correlation become an acceptable rating factor in your opinion? Should rates be based on age? Gender? Occupation? Car? Claims? Or as all of these can't be proved (in the strictest sense) to future costs should they all be ignored?

Insurance is (well should at least) be all about pricing a risk correctly. Pretty much all rating factors will be (at least partially) proxies for other risk factors. If the correct rate is charged by using factors which aren't strictly correct but link together in a way that means you get the fair price overall I don't personally see that as a problem. My opinion, others are available.

pingu

i was involved in non fault accident january last year my insurance due next week

last year it didnt go up much can't remember the amount

but this year my renewal has more than doubled:eek:
searched around using internet its its still £300 more than last year

i have maximum NCB and trying to be honest didn't make an injury claim just wanted my car repaired which wasn't badly damaged!!!

King_Nothing

Mine went up £200 at renewal, no doubt the coffin dodger who crashed into the back of me who had 1 millions years NCB, won't even pay that to insure his car, never mind suffer a £200 hike at renewal time.

starrystarry

I had a non-fault accident earlier this year so I was dreading getting my renewal quote. With prices rising so much over the last year anyway I was expecting a hefty increase but I was pleasantly surprised when my renewal arrived yesterday. £8.88 increase on the annual premium

lisyloo

because I've had one careless driver crash into my car, I am now more likely to be involved in another incident..................

I know it's not a popular view, but it makes a great deal of logical sense to me.
(I am not an insurer and don't own, run or set insurers policies).

Some people live away from other drivers, have private driveways, garages, and go to efforts to park at the empty end of the supermarket.
Others park on busy roads around less careful drivers, don't have private parking and don't go to efforts to park away from others e.g. at the supermarket.
I think it's perfectly logical and morally acceptable to include such factors in a quote and a claim is evidence of your behaviour.
This is entirely my personal view about the logic/morality and I cannot prove insurers statistics one way or the other.

vaio

If you have suffered a premium hike solely as a result of a non fault accident then the costs of that are recoverable from the at fault party just like all other consequential costs

Document the increase and stick a claim in