BEWARE Increased premium after NO FAULT accident

Spiderham

moneybags1957 wrote: »

I wonder if you are struck by a car as a pedestrian,you would be equally statistically cursed and so your life insurance should be loaded?
OMG what have I done,I BET they are now already working on it :- )

If it was possible to analyse and report on and a clear difference was shown I'd have no qualms doing it. As I've said before having a fault accident doesn't make you a worse driver, you're still the same driver you were before the accident so why should you're premium be loaded?

Also fault claims will generally be from a drop in concentration, these happen all the time. Could it not be argued the claimant was purely unlucky in when the concentration dropped?

Insurance pricing is based on inferred risk and likelihood of claim. I see no reason why something that seems very clearly to increase the propensity of claims and amount paid out on the policy should not be used as a rating factor.

What do you think insurance should be rated on? What is a fair factor and what isn't? Generally the ones loading the premium for non-fault claims were cheaper when there wasn't a fault claim. The reason for this may well be because they are able to offer cheaper premiums on the 0 non-fault claim sector because they charge the higher risk sector with fault claims more money.

mikey72

Spiderham wrote: »

.............What do you think insurance should be rated on? What is a fair factor and what isn't? Generally the ones loading the premium for non-fault claims were cheaper when there wasn't a fault claim. The reason for this may well be because they are able to offer cheaper premiums on the 0 non-fault claim sector because they charge the higher risk sector with fault claims more money.

That doesn't make any sense at all. All they will attract are people who haven't been hit by careless drivers yet. All the others will simply move to a different insurer that doesn't load the premium

(I suppose it could make sense, if they haven't been hit yet, statistically they must be more at risk as the odds increase on them being hit eventually.
So when they are hit, their insurer will sell on their details to an ambulance chaser, a credit hire company, and a personal injury company, so that's two or three thousand pounds of referral fees coming their way. Obviously the stats mean if you're hit once, you're unlikely to be hit again for that to work.
Could be true though, insurers won't publish anything to do with the reason behind it.)

Spiderham

mikey72 wrote: »

That doesn't make any sense at all. All they will attract are people who haven't been hit by careless drivers yet. All the others will simply move to a different insurer that doesn't load the premium

But it does. Run with me here. People who have had non-fault claims correlatively cost more in claims than those who haven't. Insurers who take of advantage of this can therefore charge less on the lower costing business so come out cheaper. Those who do then have a non-fault claim see a load.

Just because you can't see why it happens doesn't mean it isn't the case. I also, fully acknowledge the fact it neither means that is the reason, correlation and causation aren't equivalent. I again go back to the point of the fault claim, just because someone has had a fault claim doesn't mean they are a worse driver per se. It purely and indicator or proxy, the close correlation hints that may be the reason, as it does for non-fault claims (although in non-fault to a far lesser extent).

Regarding referral fees, I'm pretty certain any fees are far outweighed by what they have to pay in claims. I would imagine it's more a case of them thinking (the ones who do have referral fee arrangements) "someone's going to refer and get paid so we might as well make it us to mitigate losses."

A lot of people speed on the roads, I imagine the vast majority, maybe insurers shouldn't load for SP30s as they will only attract the people who haven't been unlucky enough to get caught. Maybe they shouldn't load for fault claims because they are only helping the people not unlucky enough to have a lapse of concentration at the wrong moment. Tongue in cheek points, but I hope you get my idea here.

I understand you don't see how a non-fault claim would lead to increased risk. It is non-intuitive and any reasons I theorise are only posterior ones making sense of the data I see. That doesn't mean the phenomenon is untrue and if the correlation is strong non-fault claims are a pretty good indicator to use when rating policies to get it to the appropriate price.

Analogously, I can see no reason watching a soap opera would bring people pleasure, but millions watch them. If I were a TV exec I would see a correlation between soaps and high viewing figures. I don't know why it is and it makes no sense but I would still make soaps because it works.

mikey72

I'm still with the second half of my post. Referral fees for a couple of grand for a none fault claim are worth harvesting.

Spiderham

mikey72 wrote: »

I'm still with the second half of my post. Referral fees for a couple of grand for a none fault claim are worth harvesting.

Yeah they are but what goes around comes around and if they're at it so are others probably meaning more claims. Not arguing the logic you suggest hasn't happened in board rooms, just that if it has it was bloody stupid. It's the difference between micro and macro situation.

Best way for insurers to reduce claims costs would be if litigation culture in this country were less. The way many insurers have affected litigation in this country through their actions has been to increase it. I don't think it's underhand just short-sighted, using the logic best we have it than someone else.

It's like helmets in american football. They weren't compulsory so no one wore them. If one player didn't wear them they had an advantage so everyone had to not wear them to catch up, net effect all at higher risk of injury. The NFL players therefore were massively in favour of making helmets compulsory to get rid of the possibility for advantage leading to eventual worsening for all.

It's classic Prisoner's Dilemma, hence insurers generally being against referral fees, it's just while we have them they want to ensure they get a slice of the pie to mitigate losses.

charlysez

i shopped around and finally found a policy for under £200, still high in my opinion.

then today i have a letter to say they want an extra £100 due to a fault claim........... i was rear ended last year, the other party admitted full liability and my car was written off, i didnt make a claim it was all taken care of by the other driver's insurance.

so again WHY am i being penalised, is wasnt my FAULT, i have never made a claim on any policy my entire life. there has to be a way round this, it didnt cost my insurers anything.

starrystarry

mikey72 wrote: »

I suppose it could make sense, if they haven't been hit yet, statistically they must be more at risk as the odds increase on them being hit eventually.

This perfectly illustrates your understanding of risk, or should I say your lack of it.

lisyloo

You did claim.
On the other drivers insurance and not your own.
However if they are saying it's a "fault" claim and it was a "non-fault" claim then you should get that cleared up.
You may well still be penalised for your claim but it should be a lower loading if you weren't at fault.

Just_Some_Guy

People who have fault claims are riskier than those who have no-fault claims, who are themselves riskier than people who have no claims whatsoever. You get charged appropriately.

There are, what, 25m drivers in this country and computerised records have been around for say 20y. That's half a billion driving years of statistics. You can fib with a few statistics but I think the insurers are correct on this one.

mikey72

starrystarry wrote: »

This perfectly illustrates your understanding of risk, or should I say your lack of it.

And this perfectly illustrates why you chose to work in insurance.
You quoted a small portion of my post, decided to quote only the bits you liked, and ignored anything else, you provided a quick blase comment on it, and appeared to think it somehow proved you had a point.