MSE News: 'Dysfunctional' motor insurance market pushes up premiums

Alpine_Star

Reaper wrote: »

It never fails to amaze me how long these investigations take. The OFT is wondering whether to pass it on to the Competitions Commissions, but they won't decide whether to do that until October?

Then the Competitions Commission will start all over again. Meanwhile we all carry on getting ripped off on our premiums and the insurance companies go on getting their kickbacks.

It's not only the insurance market that is dysfunctional.

It's important to understand the constraints that regulators like the OFT & CC are under. Not only are they under funded but the legal and procedural processes they are bound by to take any action are formidable and necessarily time consuming. Commerce is the corner stone of a democratic free market and any restriction placed on it has to be seen to be carefully and thoroughly considered to avoid years of legal challenge through the courts.

Andrew1472

Pincher wrote: »

Dysfunctional? It's a feeding frenzy.

Years agos, I reported a wing mirror clipping, because I thought you should. Before I knew it, a lawyer was appointed by my insurers. They rang me up, asked for photos of the scene, and quite detailed stuff. Then I got a letter from the lawyers to start legal proceedings against the other driver. God knows what they were going to claim, since there was no damage. Put a stop to it by refusing to sign anything.

Yep, exactly what I'm in the middle of now.
My car is away being repaired after a car park coming together. It was the other drivers fault and too expensive to settle between us. £600 of damage.
My broker insisted that a management company handle it, providing me with an expensive hire car immediately which I refused. Mine was safe and roadworthy and the bodyshop courtesy car is perfectly adequate.
I then had several phone calls seemingly "encouraging" us to claim for injuries. There were none!
I've now had a letter from a solicitor wanting details for when the case goes to court. Why on earth would this need to go to court!
When I finally got through to my actual insurer (LV), the whole thing was handled without any fuss or drama. Hope I haven't spoken too soon.:)
My broker will not be getting the business again when renewal time comes around.

Parking_Trouble

I think the root cause is the fact insurers outsource key elements of the claims process and everyone needs to make a profit.

Unfortunately some elements are making money for doing very little. £2000+ for the solicitor for a basic whiplash claim, £500 for the doctors report to say the patients neck hurts, excessive car hire rate and number of days, referral fees feeding the frenzy.

Insurers need to take more control and responsibiltiy. Currently it suits them all to pass the problem onto others and just recoup the excessive costs from the consumer.

It needs further (sensible) regulation to get it back under control.

sue_marie

My son was the not-at-fault driver in an accident a couple of years' back. I recently wanted to add him to my insurance for a few weeks but the insurer said the premium would be higher because his accident was within three years. I asked how they could justify that, when it wasn't his fault and he had a protected no-claims policy. They said, "sorry, but's that's how it is." Sorting out this unfair industry is well overdue.

abeezar

Inspite of having my no claim of 7 years ....I have seen my car insurance go up from the time I had my no claim as 4 years. Insurance companies has been saying that due to rising cost and fraudulent claims. In live in West London.

Is there way to find out as right of information act that what claims have been made in your street / post code area...

Or Does Insurance Company use a more easy way for classifying an area into a larger area which would have claims even though your town or street may have a good record.

thor

abeezar wrote: »

Inspite of having my no claim of 7 years ....I have seen my car insurance go up from the time I had my no claim as 4 years. Insurance companies has been saying that due to rising cost and fraudulent claims. In live in West London.

Is there way to find out as right of information act that what claims have been made in your street / post code area...

Or Does Insurance Company use a more easy way for classifying an area into a larger area which would have claims even though your town or street may have a good record.

This is something I have been wondering about. Insurance in my postcode has rocketed and insurers always put up their argument that their databases are showing people are claiming relatively more or more times or maybe even both from my area. I don't believe them and would like to see some evidence, i.e. their database. Does anyone think I could get access to this via the freedom of information act?

dacouch

thor wrote: »

This is something I have been wondering about. Insurance in my postcode has rocketed and insurers always put up their argument that their databases are showing people are claiming relatively more or more times or maybe even both from my area. I don't believe them and would like to see some evidence, i.e. their database. Does anyone think I could get access to this via the freedom of information act?

No because it's commercially sensitive data and also the FOI does not apply to businesses

mikey72

Then again, it could just be made up.

thor

mikey72 wrote: »

Then again, it could just be made up.

Which is exactly what I suspect. I don't believe the insurance industry (like the utilities) are competitive. In fact as far as I am concerned they act as a cartel. Once a company fabricates increased risk as reason to charge higher premiums for certain factors, be it occupation, area etc, it knows it can do so with the other companies jumping on the gravy train. There is no way to prove otherwise as FOI does not help in these cases it seems.

Parking_Trouble

One of the things that really winds me up about insurance companies these days is the frivalous advertising that fronts a very serious business.

Using Meerkats, Opera singers, Sheilas, animated dogs, various Comedians all used to jolly us up into parting with our cash.

Behind it all is a non-negotiated contract based on utmost good faith and a complex set of terms and conditions which bamboozle most consumers, especially when it comes to making a claim.

Reality is far removed from the amusing ads. It all makes me feel queasy.