Unfair loading to car insurance

gemsmum

Can anybody tell me (and an underwriter's explanation would be fantastic) why I am being penalised on car insurance premium because I lived abroad for seven years? I shall explain below-

I passed my driving test in 1974, have held a full clean licence since then, never been stopped for driving offences, had points or been involved in an accident I accrued full no claims on my insurance ad have always protected these. Eight years ago, we decided to live on a temporary basis to Spain ie we did not sell our house but rented out there and travelled back and forth regularly, spending time in both countries We bought a spanish registered car and insured it thru IBEX insurance who I believe are registered in Gibraltar and my insurance policy was underwritten by Lloyds of London - which in my estimation means it is a trustworthy policy.

We returned to our house full time in July last year and I had difficulty in getting any insurance company to accept my no claims bonus certificate even though I could prove that I had full no claims and the policy was underwritten by Lloyds. I found one company who would take me on and it was not too expensive but my car insurance policy is now due and I am looking for a cheaper alternative. I spoke to Swinton insurance this morning and they tell me that because I have lived abroad I may have picked up bad driving habits and because of that the original quote of some £233.00 has now gone up to £533.00. When I said that I had had a driving licence for 40 years full no claims no accidents, no points etc etc and that must show that I would be considered a good risk they were not interested just pay up and take the insurance or dont bother

Why, cannot I get someone to listen to me and explain how this loading comes about I am not a "girl racer" am nearly 60 years of age with 42 years of having a full clean driving licence.

Would it have made any difference if I had just said I have been a UK resident since I was born ?

I hope the above makes sense and someone can offer some explanation thank you

SuperHan

Have a look at this:

http://www.hmrc.gov.uk/international/rdr3.pdf


If you had a home in the UK and visited here regularly, you may have been technically resident in the UK for your time abroad anyway.

It may be pushing it given you were away for so long, but if you were coming home for 90+ days (even better if you came back for 183 days), you might find that you were UK resident.

dunstonh

why I am being penalised on car insurance premium because I lived abroad for seven years?

It is because you are a perceived higher risk than someone that is used to UK road driving.

hy, cannot I get someone to listen to me and explain how this loading comes about I am not a "girl racer" am nearly 60 years of age with 42 years of having a full clean driving licence.

it is not about you. It is about the collective pot and you are in a pot of people that have greater claims than those that do not meet that same criteria. You could be the best and most careful driver on the planet but it does matter. The next person with exactly the same information as you could be the worst.

Would it have made any difference if I had just said I have been a UK resident since I was born ?

Committing fraud is not a choice that anyone would encourage on this site. It could be false economy in the event of a claim. Its a black and white issue. You were either resident or non-resident.

System

dunstonh wrote: »

I Its a black and white issue. You were either resident or non-resident.

There is resident, resident for tax purposes, and domiciled.
Which definition do insurance companies use?

InsideInsurance

gemsmum wrote: »

Can anybody tell me (and an underwriter's explanation would be fantastic) why I am being penalised on car insurance premium because I lived abroad for seven years?

Thats easy, because someone many decades ago thought that it would impact the risk, maybe because you mix up the rules of the road with the other country you've been in, not used to the width of our roads etc and so started collecting the data.

Now enter the statisticians who can take their complete book of policies and segment the data by each answer and then compare their claims experience. This then allows them to create the technical premium, ie how much they need to charge to cover the risk "people like you" represent.

Of cause there can also be commercial considerations as different customers have different levels of pricing sensitivity, are more or less likely to switch providers each year etc

Mass market insurance is done on statistics not logic. So if they stastically find that those that are newly resident have more claims then they will charge more.

On the plus side it sounds like you almost went with Swinton insurance and so you have had a very lucky escape! My wife wasnt born in the UK and so some insurers do increase premiums slightly for her but having been here for 10 years now its minimal

SuperHan

Clifford_Pope wrote: »

There is resident, resident for tax purposes, and domiciled.
Which definition do insurance companies use?

I would assume resident for tax purposes, unless they say otherwise. As if you said you were resident, then you're not lying. You were per HMRC's tests.

The only definition of resident I can find are those provided by HMRC, so in the absence of another definition, I would say those preside.

The OP was domiciled, but I think that would make little difference, as UK domicile just means you had an intention to come back here one day, and that has no bearing on your insurance risk (or I would think not!)

rs65

SuperHan wrote: »

I would assume resident for tax purposes, unless they say otherwise. As if you said you were resident, then you're not lying. You were per HMRC's tests.

From an insurance perspective, if something isn't defined then the dictionary definition applies.

nobbysn*ts

InsideInsurance wrote: »

...........enter the statisticians who can take their complete book of policies and segment the data by each answer and then compare their claims experience. This then allows them to create the technical premium..............

Statistician - 'What sort of insurance is it, compulsory, like car insurance, or voluntary, like wshing machine isurance'

Customer - 'compulsory'

Statistician - 'Well, you're 100% obliged to buy it, so we'll double the price and add on a bit extra, because we can'

Probably more like the calculations.

FlameCloud

nobbysn*ts wrote: »

Statistician - 'What sort of insurance is it, compulsory, like car insurance, or voluntary, like wshing machine isurance'

Customer - 'compulsory'

Statistician - 'Well, you're 100% obliged to buy it, so we'll double the price and add on a bit extra, because we can'

Probably more like the calculations.

Yes, because its not a competitive market at all.

nobbysn*ts

FlameCloud wrote: »

Yes, because its not a competitive market at all.

I agree. not really. Most prices are in the same ball park. Set it high, shave a few pound off the competition. A tenner of £533 won't impress many people. If it was competitive, lets go for bogofs, 2 years for the price of 1, like you see in competitive markets, where you do have the 'take it or leave it' option.

InsideInsurance

nobbysn*ts wrote: »

I agree. not really. Most prices are in the same ball park. Set it high, shave a few pound off the competition. A tenner of £533 won't impress many people. If it was competitive, lets go for bogofs, 2 years for the price of 1, like you see in competitive markets, where you do have the 'take it or leave it' option.

Never have been in the same ballpark for me.

Now admittedly at the moment things are a little unusual but my insurance quotes range from £750 to £8,000 with most being around £3,000

Back when I had my old car and didnt have a new driver on my policy the range was still £450 to £1,500 with most around £850. Some being three times the price of the others really isnt the same ball park to me.


As to offers? Certainly my former clients were dying to be able to do 18 months for the price of 12, not quite bogof but fairly close. Unfortunately like most insurers their IT systems were antiquated and the fact a policy is 12 months in duration was hard coded in thousands of places. IT's estimate for changing the system to allow it to work was £30m with only a 20% probability of success

Hence you get so many 12 months for the price of 9 etc