Car Insurance Article Discussion

Skiday

Tipp-Ex

I think you're quite right to feel aggrieved, and I don't think raskazz kindly standing up for the insurers (again) explaining why they do this, helps us to accept that it right for them to do it. Isn’t this forum a place for the everyman to stand up and be heard?

They make up their own rules, apply them how it suits them best and brings them most profit, and change them if they want to, and we have no power to do anything as long as they all club together and agree to do the same thing (a bit like a cartel).

The chance of tossing a coin twice and getting heads both times is 1 in 4. So if you toss a coin once and get heads, what is the chance of tossing it now and getting heads? The insurance company will tell you (if they use their principles) that it is 1 in 4, but in fact it is now 1 in 2, or 50:50, just as it is any single time you toss a coin.

Because something, over which you have no control, has happened to you in the past does not necessarily make it more liable to happen in the future. We all can have our car driven into at some time, and that risk should be shared by us all in our premiums.

I would like to know, Martin Lewis, do you read this forum?

raskazz

Skiday wrote: »

They make up their own rules, apply them how it suits them best and brings them most profit

As any other business does, including, presumably, the business you work for?

Skiday wrote: »

as long as they all club together and agree to do the same thing (a bit like a cartel).

There is no 'clubbing together' or collusion. Motor insurance is a highly competitive market and indeed several motor insurers have made a loss in the last couple of years. This insinuation that there is 'clubbing together' betrays an inherent bias in your opinion, I think your mind has already been made up as to what you think of the insurance industry. Please post any evidence you have to back up this extraordinary assumption.

Skiday wrote: »

The chance of tossing a coin twice and getting heads both times is 1 in 4. So if you toss a coin once and get heads, what is the chance of tossing it now and getting heads? The insurance company will tell you (if they use their principles) that it is 1 in 4, but in fact it is now 1 in 2, or 50:50, just as it is any single time you toss a coin.

This is very creative but unfortunately is bad statistics! Two coin tosses are independent events, i.e. the result of the first toss does not affect the result of the second. The incidence of a claim is not an independent event, because if someone has been involved in a claim in one year (fault or non-fault) then the probability that they are involved in one in the next year is higher, as proved by the clais data the insurer has gathered.

Skiday wrote: »

Because something, over which you have no control, has happened to you in the past does not necessarily make it more liable to happen in the future.

Again, this is simply not correct. The insurer's claims statistics show that you are more likely to incur a fault claim if you have been involved in a non-fault claim. Why that might be is open to debate, but insurers are need not be concerned with the causation, only with correlation.

Skiday wrote: »

We all can have our car driven into at some time, and that risk should be shared by us all in our premiums.

I disagree, I have never been involved in any accident and pay lower premiums as a result. I don't want to subsidise higher risks and don't see why I should either.

To extend your argument, perhaps insurance companies should charge youngsters the same premium as middles-aged drivers because 'we all get old'. Ridiculous.

raskazz

Skiday wrote: »

It is my hope that all in this thread will be read and taken on board by Martin, and that he might get a little hot under the collar like he does about banks. Insurance companies are there to make money out of us and I can see very little evidence (none actually) that they apply the mathematical laws of risk fairly and evenly.

Care to post any evidence that insurers apply the mathematical laws of risk unfairly and unevenly? Interestingly, your own knowledge of mathematical laws seems a bit rusty given what you posted up above...

Skiday wrote: »

When I changed address to 3 miles down the road to a similar estate in a similar area, and where cars simply do not get stolen – ever (the Isle of Wight)

There are other factors apart from theft that vary with geographical location.

Skiday wrote: »

my premium went up by 25% even though I reduced my mileage from 5k to 3k.

Traffic density, historical data on rate of accidents in the vicinity, socio-economic make-up all affect the risk, not just theft.

Skiday wrote: »

I just did two ‘Joe Bloggs’ quotations on line with identical details bar the postcode and the difference – 3.4%.

Presumably part of the 25% figure was an administration fee.

Skiday wrote: »

My wife was/is with a different insurer, and with no changes at all other than postcode, her premium went down by more than 25%.

The answer is in your statement, she is with a different insurer. They will probably have had a different historical experience in that area and hence will view the risk differently.

Skiday wrote: »

Evidence like this points to the conclusion that they charge what they think they can get away with rather than what the risk tables indicate they should.

No it doesn't, it merely confirms that different insurers will have had a differenct claims experience, different rating structures and different fees for administrating changes.

Skiday wrote: »

By the way, before the days of Jeremy Vine, I remember Jimmy Young telling the tale of a conversation between him and his broker. When Jimmy Young remonstrated over the high cost of his car insurance due to him being a broadcaster, his broker said (true story!) in all seriousness,
“You’re a broadcaster for the BBC, you could have the Prime Minister in your car!” Jimmy said he couldn’t believe how daft that was. I can’t believe nothing has changed.

But it's not daft, the broker was not being literal but using an (extreme) example to illustrate the risk. Broadcasters are more likely to have passengers for whom appearance is crucial to their job (i.e. other broadcasters), hence any third-party injury claims are likely to be much higher than average.

Skiday wrote: »

I can reach no conclusion other than that they pretty much make it up as they go along, and if they want me to believe otherwise then they will have to do what I did in maths class at school and show their workings!

As I have just mentioned in another post, your mind has clearly already been made up. Why should they 'show their workings'? Should any business be forced to disclose how they price their products?

Skiday wrote: »

Show the risk tables and the accident and claim statistics. They could put it all on the web.

So you think that insurers should be forced to divulge data that is central to the operation of their business, and that they have spent decades accumulating, to their competitiors? You cannot be serious, though sadly it seems you might be....

56cheffy

I'm considering buying a car for my 17 year old son as a surprise!

He only has a provisional licence at the moment, his test is in 3 weeks. At the moment as he has not got a car he has no insurance!

If I buy a car for him in his name (can I do this without him knowing) and even though he wont be able to drive it yet can I park it on the street if it is not insured and then wait till he passes his test (hopefully) and then get insurance!

I think I know that the answer will be no, but I just thought I'd double check!

Thanks

Oh..and can anyone recommend a company to insure him with, best yet is £2300!!!!

sanjaymaz

I have just used Martin's technique and while it did save me money about £100, there is a minor flaw. The cheapest quote overall was from Moneysupermarket and it was an Admiral quote for £588 (high because I had a vehicle stolen from my home recently). Anyway, I then went to the other sites and got quotes for many companies but the Admiral one was still the best. I then tried to buy the Admiral policy through moneysupermarket but couldn't so had to call them up at which point they told me that the quote was £651 and this was because I had done so many recent internet searches. Looking back this makes sense as each price comparison site gave an increasingly worse quote for Admiral.

Anyway, luckily I requoted on the admiral site directly and secured a deal for £602 so at least the technique found me the cheapest insurer although I could have said a further £14 by not searching beyond the first comparison site.

Tillydot

My car insurance is up for renewal and someone has told me it is not worth protecting your no claims (I have the 9 years). Does anyone know if this is the case. My car is 10 years old. Appreciate any help.

mute_posting

sanjaymaz wrote: »

I have just used Martin's technique and while it did save me money about £100, there is a minor flaw. The cheapest quote overall was from Moneysupermarket and it was an Admiral quote for £588 (high because I had a vehicle stolen from my home recently). Anyway, I then went to the other sites and got quotes for many companies but the Admiral one was still the best. I then tried to buy the Admiral policy through moneysupermarket but couldn't so had to call them up at which point they told me that the quote was £651 and this was because I had done so many recent internet searches. Looking back this makes sense as each price comparison site gave an increasingly worse quote for Admiral.

Anyway, luckily I requoted on the admiral site directly and secured a deal for £602 so at least the technique found me the cheapest insurer although I could have said a further £14 by not searching beyond the first comparison site.

Sounds like a bit of a swizz - cheeky sods.

Although I have had similar "shady" goings on with sainsburys.

Moving house on the day the insurance is due, I had a renewal quote from sainsburys at the old address (£640) put in details for the new address on one of the comparrison sites and sainsburys came out at £340 (not cheapest but a respectable 3rd), changed address to old address and whilst every other qoute was the same, sainsburys were suddenly "unable to qoute" - I wonder why? (cough! <whispers> brand new customers only</whispers>)

Anyway, gone with Privilege for £320 plus (fingers firmly crossed) £70 cashback via TopCashBack.

What has surprised me was that in previous years Direct Line, Privilege and Tesco (Insurance, not compare or value) were always:-
a) cheapest
b) within pence of each other

The only reason I changed to sainsburys last year was that they were the same price and I'd had CS issues with Tesco

This year DL were about 30% more and Tesco almost 100% more than Privilege

MP

PS, I don't "think" Privilege came up on the first comparrison, so always do the first 2 or 3 from the list on the article.

mute_posting

Tillydot wrote: »

My car insurance is up for renewal and someone has told me it is not worth protecting your no claims (I have the 9 years). Does anyone know if this is the case. My car is 10 years old. Appreciate any help.

Depends on how much it is for you to "protect" versus what you would have to pay extra if you lost it... (remember you may loose it through no fault of your own - so it is no use saying "but I drive safely" - it's the other idiots on the road that will cause you to loose it)

For me it is about £50 to protect but about £500 extra if I were to not have the no claims - so I definitely think it is worth it.

Skiday

Reply to Raskazz

Whilst you have not stated for whom you work, or did work for, you are obviously an insurance insider. Whilst I could carry on quoting anecdotal evidence (obviously the only evidence I have) I will not because:
1. I am simply reflecting the frustrations of the many people posting on this thread who have done so because they feel that their not getting a fair deal, and I'm sure they will continue to post.
2. I am more interested in getting Martin Lewis' opinion then yours, as his opinion can be trusted as unbiased, whereas yours, well we don’t know, do we?
3. I don't think this thread was set up for this kind of argument.
4. You seem to be taking this personally.
5. You think ALL my points, and those of the contributors who feel they have not had a fair deal, are invalid, so there's no point in making any more.
6. If you think my mind is made up, I think yours is set in stone.
7. You seem to have more time on your hands than me.

The tone you set when putting the industries side of things sounds a bit like the way the banks may have defended their practices a while ago, but that didn't stop Martin from shaking them up and changing people's attitudes to them.

But I suppose you will have some cutting put-down for me though.
Go on then - have the last word......

moredough

Skiday wrote: »

2. No claims bonus is supposed to assess the risk of the driver, so why is it linked to the car? e.g. if I am a fan of a particular model of car and have full no claims, and then choose to buy another example of the same car, same engine, same colour, same year - everything, and I can only drive one at a time remember, but I will have zero NCB for the second car So my wife who has had two accidents in the last 5 years but protected NCB can get a better deal if she replaces her car with the new one, than me, who hasn't had a crash for 25 years, if I have the new car a second car in my name.
Skiday

A couple of years ago I bought a new car. My existing insurers wouldn't allow me to transfer my policy from my old car to my new car as it was an import. I didn't sell my old car immediately. I then owned 2 cars in my name both requiring insurance. My wife owned another car insured in her name with me as a named driver. When I tried insuring my new car, I wasn't able to take my NCB from my old car as it was still insured. The broker, however, was able to offer me a NCD based on the fact that I was a named driver on my wife's policy. My wife had 5 years NCB and that is what the broker gave me on the new car. I only had 4 years NCB on my old car. When I sold the old car, I let the policy on that one expire, to avoid any cancellation fees, as it only had a month or so to run. When the policy on my new car was up for renewal, I shopped around, but my existing brokers managed to beat the best quote i'd been offered. The new insurers accepted the NCB from the new car with the extra year gained from my wife's policy.

Go Figure.