Motor insurance - the cost of commuting use post-pandemic

DullGreyGuy

Mustbeananswer?? said:

Is there not a case for a 5 Star Insurance expensive policy where everything is covered,10 YEARS AGO ,,,,Comprehensive covered everything(did what it said on the tin).Who can predict how many miles they are going to do next year ...and at what point do you void the insurance if there is a claim and you have under estimated.Everything is far too complicated nowadays.ALSO people change occuations more regularly and retire or de retire a lot more.   

I tell people I started working in insurance 20 years ago but actually it was a bit longer as I briefly worked in Claims whilst at uni and then left the industry before returning post university. 

Having to declare mileage has been about a lot longer than 10 years ago, it was certainly a thing 23 years ago and I'm fairly sure I remember being asked about it the first time I bought a policy in 1996. So on that front you are looking through rose tinted glasses. 

What Comprehensive covered has changed a little in that time but then people have become more price sensitive and promiscuous. For many price is king and if you can knock £10 off by removing Driving Other Cars or moving loss of keys to an optional extra then you are massively more likely to sell the policy and you have a modest chance of cross selling a key cover add on for an extra £12 near the end of the process. In the 90s you may have phoned or visited your broker to see if they can do any better and that'd have probably been it unless you'd been made curious by the adverts from Direct Line.

Mustbeananswer??

Yeah ...so everything is in the Insurers favour...and gives them plenty of options to wriggle out of a claim on a technicality. 

BarelySentientAI

Mustbeananswer?? said:

Yeah ...so everything is in the Insurers favour...and gives them plenty of options to wriggle out of a claim on a technicality. 

If everything was in their favour then they wouldn't be making a loss.

Most of the 'technicalities' are people not understanding what they have bought - often because they want the cheapest possible price but assume everything they can imagine is included.

DullGreyGuy

Mustbeananswer?? said:

Yeah ...so everything is in the Insurers favour...and gives them plenty of options to wriggle out of a claim on a technicality. 

The opposite really, in most cases insurers do better off financially from selling the full fat, all the bells and whistles policies which typically have larger margins. Mass market consumer insurance is purely a numbers game with tiny margins and as BSAI says in recent years the industry has been making underwriting losses as claims and costs have exceed premiums. 

T&Cs are just exactly that, if we remove DoC we reduce the price, if we enhance DoC we increase the price. It's not that much different to if you take a 2L car and either decide to reduce the engine to a 1.6L or increase it to 3.2L V6. Just with cars most people realise changing the engine will change performance but with insurance, and in particular Home insurance, its just assumed its all the same and the price difference is based on "greed" not quality. 

In principle you can have whatever you want, as long as it isn't illegal or creates unacceptable moral risks, the problem is that getting an underwriter, a pricing actuary and wordings lawyer to personally draft a policy for you means it'll cost you 10 times the price of an average Motor policy before you even add the risk premium. Corporates, whose insurance costs are already vast, do exactly this but they typically need good coverage not just a piece of paper to comply with the law.