Insurance Premium Significantly Reduced

Lewisp8

I’ve been driving for 3 years now (24 Years Old),I’ve paid £1500, £900 & £750 for insurance over the course of the past 3 years. Every year I’ve been shopping around for insurance as the renewal quotes have been higher than if I started a new policy. My policy is with AGEAS now and is due to expire in a month and I’ve been getting quotes for about £550- £600 . I’ve had a renewal invitation come through this afternoon from my current insurer for £189.00!! 

Why is this so low? I get it will reduce as my NCD increases but by two thirds? The same provider is offering me as a prospective new customer the same cover for £600 on the comparison websites with the same cover details. I’m going to accept the renewal but just puzzled why the price has gone down dramatically, I can’t get any quotes anywhere near the renewal price. I was going to move to another provider because that offered breakdown cover but won’t anymore. 

Can anybody else give me any insight?

facade

As well as more NCD, your risk profile changes as more time elapses from passing your test, plus you are older, and may now fit into a customer profile that the insurer "likes", so they offer lower prices to keep you.

daveyjp

Whilst any reduction is welcome, £600 to less than £200 would get me checking every detail very closely if my personal circumstances haven't changed over the year (address, vehicle type and employment status and job title) and confirming with the company that it is correct.

sheramber

Your age may have moved into a different  risk bracket.

shiraz99

All above is correct but I'd also be slightly concerned that your renewal is only £189 where everywhere else is £600 or more, something doesn't really add up, particularly for a 24 year old with only 3 years NCD and a short driving history. I'd seriously check to make sure they have all the correct information, and this isn't some kind of glitch based on bad data.

Aretnap

sheramber said:

Your age may have moved into a different  risk bracket.

Unlikely. Age brackets aren't really a thing anymore. The days of a big drop on your 21st birthday, then another big drop on your 25th birthday are largely gone. Algorithms are more.spohisticated than they used to be and so while your premium does go down as you get older, it's more likely to take the form of a small drop every month,.or even every day, rather than a big drop on a specific milestone. So it's unlikely that being a year older would make such a dramatic difference to the OP's premium - and certainly wouldn't explain the difference between his renewal premium and the ones he's getting from online quotes.

Without suggesting that he should look a gift horse in the mouth, I'd echo the advice that he should check very carefully that all the information on the renewal form is correct and they don't have him down as 54 years old, and also that he is comparing the other policies he's looking at have similar levels of cover and that he isn't comparing comprehensive quotes with third party fire and theft etc.

Lewisp8

shiraz99 said:

All above is correct but I'd also be slightly concerned that your renewal is only £189 where everywhere else is £600 or more, something doesn't really add up, particularly for a 24 year old with only 3 years NCD and a short driving history. I'd seriously check to make sure they have all the correct information, and this isn't some kind of glitch based on bad data.

I've read through the policy details on the renewal and the statement of facts, everything is accurate and the level of cover is what I need so I'm going to accept the renewal. I'm not going to complain about a reduction in premium. A friend of mine said that he's had a similar reduction in price, apparently he thinks it is due to a new bypass road built 9 months ago which diverts the majority of dual-dual-carrigeway traffic away from the town, not sure if the insurer would care about that enough to affect premiums though! 

lesleyvhalifax

wait till you hit 50 mine has dropped to £140

Herzlos

If all the details are fine on the paperwork then go for it.

Who is the insurer? Someone you've heard of?

biscan25

Insurance is priced using generalised linear models, and AI.
These pricing models break quite regularly, if someone has a lucky mix of risk factors, and there is often an insurer willing to quote significantly cheaper than the rest.
Take the cheap quote and say nothing. Just remember you may need to budget for a significant increase again next year.

I moved to London, was paying £220 for insurance, then it went down to £149 for a year. I didn't complain, but £210 was the cheapest next year, and its pretty static there now.

Grumpy_chap

shiraz99 said:

All above is correct but I'd also be slightly concerned that your renewal is only £189 where everywhere else is £600 or more, something doesn't really add up, particularly for a 24 year old with only 3 years NCD and a short driving history. I'd seriously check to make sure they have all the correct information, and this isn't some kind of glitch based on bad data.

£189 is approaching the lowest a premium can be even to cover the fixed costs of administering the policy.

Maybe the OP needs to check they quoted for age 24 and not age 42.