Why are car insurance quotes so random?

wwarby

Today I got a car insurance renewal quote for £445. I called to renew and made a couple of updates on the policy as I went: reduced the car value a bit, changed my job (software developer in central government, formerly local government), noted that I had installed a rear parking camera and parking sensors (making the car safer to drive) and removed an old accident and some old points off my licence. Net effect should be to bring the quote down right? I was told after these changes they couldn't offer me a quote because their system had judged me to be such a risky customer that my quote exceeded their maximum of £1,650. On the same car they had insured me on for the last three years, used in exactly the same way.

GoCompare gave me 88 quotes, starting with one at £470 from a known scam company. The first reputable one was nearly £500. Others went over £2,000. I separately tested Direct Line who quoted £1,250. I went to the website of the company with the £500 quote on GoCompare and directly entered the exact same information. £350. Deal.

I can think of no other market with such a chaotic and irrational approach to pricing. Insurers are barely able to differentiate on quality - as long as you trust them to pay out in the event of an accident, they are effectively identical to the consumer which should cause aggressive competition on price given the crowded nature of the market. If I was looking for shark wrestling insurance I could understand the difficulty in assessing the risk accurately, but the risks involved in motor vehicle ownership must surely be understood exceptionally well by now, so how is it possible that one company can see fit to insure me for £350 and another thinks £1,650 would be a bad bet based on the exact same risk criteria?

I'd love to hear from any industry insiders who can shed any light on the baffling world of insurance quotes.

Foxy-Stoat_3

wwarby wrote: »

I'd love to hear from any industry insiders who can shed any light on the baffling world of insurance quotes.

I think the industy insiders would love to know the same answers too !

londonTiger

retrofitted parking sensors seldom reduce the value of insurance. They are often treated like any other mods and mods ususally increase the premiums.

If it's not factory fitted, it would not meet the rigorous European/British safety and build standards that car manufacutrers are required to meet. Thus more likely to have "blind spots" where it cannot detect obstructions or just plain fail.

BeenThroughItAll

londonTiger wrote: »

If it's not factory fitted, it would not meet the rigorous European/British safety and build standards that car manufacutrers are required to meet. Thus more likely to have "blind spots" where it cannot detect obstructions or just plain fail.

Sweeping statement, and utter nonsense to boot.

rudekid48

BeenThroughItAll wrote: »

Sweeping statement, and utter nonsense to boot.

Not in the world of insurance. The poster is correct in that anything not 'factory fitted' is classed as a modification and most mainstream insurers will decline to quote or load their rates.


Some - such as Admiral - will also load for upgrades that are factory fitted.

BeenThroughItAll

rudekid48 wrote: »

Not in the world of insurance. The poster is correct in that anything not 'factory fitted' is classed as a modification and most mainstream insurers will decline to quote or load their rates.

Some - such as Admiral - will also load for upgrades that are factory fitted.

Yes, I know how insurance works. I was involved in writing the quotation engines for one of the UK's first direct online insurers back in the 90s.

You'll notice, if you care to check, that I didn't quote the part of the post which referenced insurance costs, merely the part stating that 'If it's not factory fitted, it would not meet the rigorous European/British safety and build standards that car manufacutrers are required to meet', which is simply not true - as many retrofit items are CE marked, TUV marked or otherwise tested to legislated standards.

I also quoted the part which stated "Thus more likely to have "blind spots" where it cannot detect obstructions or just plain fail.", also not true. Plenty of aftermarket parts (parking sensors and others) are equally as good or better than OEM. Take the sensors fitted to the B5.5 Passat, or 3U Skoda Superb, for instance. They fail so regularly, and are so expensive (£80+ per sensor) that they are normally replaced with cheap £10 eBay kits which work better and more reliably.

AdrianC

I can actually see the logic in using aftermarket parking sensors as a bit of a warning signal, tbh.

I'd suspect that drivers are more likely to rely on them, and miss seeing an obstacle that they didn't detect. I've certainly heard drivers complaining that their sensors didn't tell them about a bollard or similar, and how it was so unfair that they should be expected to pay for the damage as a result...

It may also be that, actuarially, they are more likely to be fitted by drivers with restricted mobility or other issues, who are at higher risk of collisions.

But if every insurer used exactly the same calculations, then every time you got a quote, everybody would quote the exact same...

dacouch

wwarby wrote: »

Today I got a car insurance renewal quote for £445. I called to renew and made a couple of updates on the policy as I went: reduced the car value a bit, changed my job (software developer in central government, formerly local government), noted that I had installed a rear parking camera and parking sensors (making the car safer to drive) and removed an old accident and some old points off my licence. Net effect should be to bring the quote down right? I was told after these changes they couldn't offer me a quote because their system had judged me to be such a risky customer that my quote exceeded their maximum of £1,650. On the same car they had insured me on for the last three years, used in exactly the same way.

GoCompare gave me 88 quotes, starting with one at £470 from a known scam company. The first reputable one was nearly £500. Others went over £2,000. I separately tested Direct Line who quoted £1,250. I went to the website of the company with the £500 quote on GoCompare and directly entered the exact same information. £350. Deal.

I can think of no other market with such a chaotic and irrational approach to pricing. Insurers are barely able to differentiate on quality - as long as you trust them to pay out in the event of an accident, they are effectively identical to the consumer which should cause aggressive competition on price given the crowded nature of the market. If I was looking for shark wrestling insurance I could understand the difficulty in assessing the risk accurately, but the risks involved in motor vehicle ownership must surely be understood exceptionally well by now, so how is it possible that one company can see fit to insure me for £350 and another thinks £1,650 would be a bad bet based on the exact same risk criteria?

I'd love to hear from any industry insiders who can shed any light on the baffling world of insurance quotes.

Without knowing the full details, here goes from what you've said.

The renewal premium would have already been invited taking into account the accidents and convictions not being applicable anymore. Insurers systems are programmed to do this so you deleting them would make no difference.

The car value tends to make no difference to a premium, there are a small amount of Insurers who will increase a premium when a car's value falls below certain parameters.

I suspect from how you've phrased your new job that you've described yourself as a software developer in central government whereas you had previously been down as just working for a local government. Insurers tend to like civil servants & local government staff as traditionally they've been a good risk so generally receive a discount for their occupation.

Software developers can attract a loading with some Insurers.

I suspect they've now shown your occupation as a "software developer" with the employer's business as something along the lines of "computers" instead of employers business as "civil service" thus losing any civil service / local government discounts and possibly attracting a loading.

In your shoes I would describe yourself as a Civil Servant with your employers business as "Civil Service". This is traditionally how virtually all civil servants described themselves as the government preferred their staff not to disclose their exact occupation. You may find doing this attracts a discount and if software developer is a loaded occupation with the insurers you're using will avoid the loading.

I suspect Rudekid is on the right lines in that the person you've spoken to has entered the parking cameras/sensors as vehicle modifications which tends to attract a relatively large loading.

Sensors and Cameras are relatively new technology which most Insurers are unlikely to have collected claims data about so would not know whether or not they reduce claims.

My own opinion would be that parking sensors / cameras would have very little impact on claims for a motor insurer as parking claims are relatively cheap for an Insurer to settle. I would also expect the difference they make for a male driver is even smaller.

You need to understand that the majority of Insurers call centre staff have very little training in insurance. Most of their training is in how to keep the length of calls down so they can answer more calls and general customer service. The chances are the person you spoke did not interpret the information you gave her fully and has simply entered it into the system and the computer says no.

rs65

wwarby wrote: »

If I was looking for shark wrestling insurance I could understand the difficulty in assessing the risk accurately, but the risks involved in motor vehicle ownership must surely be understood exceptionally well by now

I think the likely outcome of shark wrestling is fairly certain. The likelihood of any individual making a motor claim is a greater unknown.

mgfvvc

rudekid48 wrote: »

Not in the world of insurance. The poster is correct in that anything not 'factory fitted' is classed as a modification and most mainstream insurers will decline to quote or load their rates.

I just had the underwriters at a major insurer say "we won't class those as modifications, we'll just write them up in the policy notes.":D