MSE News: Car insurance premiums too high, competition watchdog says 17 December 2013 at 2:35PM in Insurance & life assurance 11 replies 2.1K views

Former_MSE_Helen

"Car insurance premiums are too high and should be cut through a number of 'far-reaching reforms', the CC says..."

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Car insurance premiums too high, competition watchdog says




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my_names_dave

Too expensive? Some of the companies on the comparison sites are writing at a loss just to get the business in.

Percy1983

my_names_dave wrote: »

Too expensive? Some of the companies on the comparison sites are writing at a loss just to get the business in.

How can they be quoting at a loss?

They give me a quote, I don't crash they have my money for doing very little, if I crash and it costs more than the premium they have made a loss.

So surely at the time of quoting its a schrodinger equation as I have both crashed and not crashed and we will only know when the year is up which is the reality.

opinions4u

I read this as about 2% too high.

Hardly earth shattering. They seem to have missed all sorts of other dubious practices that drive up premiums.

Quentin

my_names_dave wrote: »

Too expensive? Some of the companies on the comparison sites are writing at a loss just to get the business in.

What relevance is that?

We know from anecdotes on MSE some punters get their insurance for coppers.

Doesn't mean that generally we can buy from companies cheaply. And we know that some companies "cheap" comparison site prices mysteriously evaporate when we try to buy them.

You won't get too much sympathy on MSE for companies claiming to be losing money on car insurance!

my_names_dave

Quentin wrote: »

What relevance is that?

We know from anecdotes on MSE some punters get their insurance for coppers.

Doesn't mean that generally we can buy from companies cheaply. And we know that some companies "cheap" comparison site prices mysteriously evaporate when we try to buy them.

You won't get too much sympathy on MSE for companies claiming to be losing money on car insurance!

Quentin, do you not see the connection between ridiculously cheap website prices and the extremely high admin and cancellation charges that people constantly complain about on here? Do you not think there is a link somewhere?

That is what I'm complaining about. They do not mention the fact that that the cheapest insurer is going to be the one that charges the most fees.

ArnoldRimmer_2

Ironically it looks like this announcement had bumped up insurance costs. I got quotes a few days ago for my first car of around £550. When I went to confirm the insurance yesterday the costs have jumped to ~£850 as some of the key players, like Admiral, have withdrawn their quotes.

Going to leave it a couple of days in the hope that it settles down again...

savercol

I am not in anyway connected with any company but have to say well done to Go Compare & Diamond Insurance. 18 yo Daughter just passed test and we have swapped Wifes 2 litre car for a smaller car for Wife with Daughter as second driver (no lies). Quoted £950 for a 2nd hand Citroen C1 but only £770 for a £10500 new C1. Opted for a 2 year old Kia Rio 2 with a quote of £1100 which I believe is very cheap. Diamond say they are for Women only which I thought was illegal. Anyway, part of Churchill I was told as they tried to sell me loads of other stuff.

crittertog

Implementing a cap on repair costs would be sensible, so long as it still allows the owner to get their vehicle repaired at the reputable repairer of their choice. For example, some manufacturers require that bodywork repairs be done at a bodyshop approved by them, otherwise the anti-corrosion warranty is void. If the proposed cap prevented someone getting their vehicle repaired by one of their manufacturer's approved bodyshops, and they lost their warranty, that would be unfair.

I also have concerns should the at fault party have more control over where the vehicle is repaired (obvious conflict of interest - cost vs quality of repair), and the provision of hire cars (e.g. the insurer will want to give you a small cheap hactchback, but you may need an estate car, or you may struggle with low-torque engines, etc). I do agree that stopping "mickey-taking" claims (e.g. "needing" an AMG Mercedes hire car) is sensible, though.

Quentin

my_names_dave wrote: »

.....That is what I'm complaining about. They do not mention the fact that that the cheapest insurer is going to be the one that charges the most fees.

Where are you complaining about this? Not in this thread anywhere?

If you make lots of changes and get charged fees, then either go with one of the cheap insurers who let you do changes online free of admin fees, or pay more premium with an insurer that won't charge fees.

sithemadmonkey

crittertog wrote: »

I also have concerns should the at fault party have more control over where the vehicle is repaired (obvious conflict of interest - cost vs quality of repair), and the provision of hire cars (e.g. the insurer will want to give you a small cheap hactchback, but you may need an estate car, or you may struggle with low-torque engines, etc). I do agree that stopping "mickey-taking" claims (e.g. "needing" an AMG Mercedes hire car) is sensible, though.

There is a delicate balance to be struck, and I wonder how the Competition Commission will achieve it. Give too much power to the at-fault insurer, and they will do the cheapest job possible at the expense of quality. Take too much power away and third parties will find every opportunity to take a cut and increase expenses, at the expense of premiums.

When the OFT first referred the issue to the CC they seemed at a loss as to how to remedy the issue, even considering the possibility of returning to 'knock for knock' arrangements!