Neighbour £168 a year cheaper car insurance!

jaykurb

I used the Money Saving Expert insurance comparison tool. I entered my postcode, and it automatically selected my address, which includes a house name and a door number. After receiving several quotes, I selected one and proceeded. However, when I reviewed the details at the end, I noticed that while the door number was correct, the address used my neighbour's house name instead of mine, even though our door numbers differ. When I corrected the address, the quote increased by £168! I then accessed MoneySuperMarket's settings and changed it to display only the door number (excluding the house name), and the quote increased even further. I can’t understand how the price can vary so significantly when it still shows my door number, albeit with my neighbour’s house name, which is only a few metres away.

DullGreyGuy

jaykurb said:

I used the Money Saving Expert insurance comparison tool. I entered my postcode, and it automatically selected my address, which includes a house name and a door number. After receiving several quotes, I selected one and proceeded. However, when I reviewed the details at the end, I noticed that while the door number was correct, the address used my neighbour's house name instead of mine, even though our door numbers differ. When I corrected the address, the quote increased by £168! I then accessed MoneySuperMarket's settings and changed it to display only the door number (excluding the house name), and the quote increased even further. I can’t understand how the price can vary so significantly when it still shows my door number, albeit with my neighbour’s house name, which is only a few metres away.

Insurance pricing is highly complex and there are a range of possible options. First of all, was it higher prices from the same insurers or different insurers came back at different prices?

1) Counter Fraud... you clearly live at one address, therefore doing quotes for you living at three different addresses looks like quote manipulation so insurers load the prices

2) Credit Checks/ Socioeconomic considerations... some insurers will do credit checks or other aspects to judge your socio-economic status. Bottom 10% or top 1% and you are likely to pay more than Joe Public. Having incorrect details may have resulted in a non-match so you get average pricing

3) Dynamic Pricing... insurers typically want a blend of customers, even if its a blend within a niche, and so may increase the prices if they are being asked for too many from customers with the same characteristics. Imagine being an insurer where half your customers have BMWs because your algorithm had a mistake and was pricing them too cheap, and then it comes to light that a £5 key fob that can bought online will open every single BMW ever made... what do you think would happen to your theft claims? 

4) Elasticity Testing... for a proportion of customers insurers intentionally adjust their price, this is done psuedorandomly. By increasing/decreasing prices and recording the difference in conversion rate an insurer can then estimate the impact if they increased young drivers rates by 10% or made BMWs 20% more expensive to insured because of a fob issue. Whilst it's "random" it often needs to be repeatable so the same customer getting a second quote will be allocated to the same bucket. So you need to use a seed to ensure repeatability. Names a dangerous one to use because there is a strong correlation with race or religion but first line of the address may be a reasonable candidate. 

JohnSwift10

I used that site as well and got a quote for myself only.

Then I did a quote adding my daughter as an additional driver and it was nearly £200 more so I changed the quote back to just me and they added another £60.

So I gave up with that site.

jaykurb

DullGreyGuy said:

jaykurb said:

I used the Money Saving Expert insurance comparison tool. I entered my postcode, and it automatically selected my address, which includes a house name and a door number. After receiving several quotes, I selected one and proceeded. However, when I reviewed the details at the end, I noticed that while the door number was correct, the address used my neighbour's house name instead of mine, even though our door numbers differ. When I corrected the address, the quote increased by £168! I then accessed MoneySuperMarket's settings and changed it to display only the door number (excluding the house name), and the quote increased even further. I can’t understand how the price can vary so significantly when it still shows my door number, albeit with my neighbour’s house name, which is only a few metres away.

Insurance pricing is highly complex and there are a range of possible options. First of all, was it higher prices from the same insurers or different insurers came back at different prices?

1) Counter Fraud... you clearly live at one address, therefore doing quotes for you living at three different addresses looks like quote manipulation so insurers load the prices

2) Credit Checks/ Socioeconomic considerations... some insurers will do credit checks or other aspects to judge your socio-economic status. Bottom 10% or top 1% and you are likely to pay more than Joe Public. Having incorrect details may have resulted in a non-match so you get average pricing

3) Dynamic Pricing... insurers typically want a blend of customers, even if its a blend within a niche, and so may increase the prices if they are being asked for too many from customers with the same characteristics. Imagine being an insurer where half your customers have BMWs because your algorithm had a mistake and was pricing them too cheap, and then it comes to light that a £5 key fob that can bought online will open every single BMW ever made... what do you think would happen to your theft claims? 

4) Elasticity Testing... for a proportion of customers insurers intentionally adjust their price, this is done psuedorandomly. By increasing/decreasing prices and recording the difference in conversion rate an insurer can then estimate the impact if they increased young drivers rates by 10% or made BMWs 20% more expensive to insured because of a fob issue. Whilst it's "random" it often needs to be repeatable so the same customer getting a second quote will be allocated to the same bucket. So you need to use a seed to ensure repeatability. Names a dangerous one to use because there is a strong correlation with race or religion but first line of the address may be a reasonable candidate. 

Thank you for your detailed explanation. I appreciate that insurance pricing is inherently complex and that even small differences, such as slight variations in employment details etc can affect a quote. However, in my case every detail remains identical: my age, sex, vehicle, licence history, and even my unique driving licence number. The only change is the house name, while the door number, road, and postcode are exactly the same. Yet when my correct house name is used, the quote increases by £168.

Regarding the counter-fraud aspect, I supplied the correct details to the Money Saving Expert comparison tool. It was MoneySuperMarket that altered the house name (while retaining the correct postcode and door number).

I realise I’m essentially trying complaining about the algorithm – something that might well be futile – but it is incredibly frustrating to see such a significant price jump for what appears to be a negligible change. It’s hard to understand how, despite all my personal details remaining constant, the system justifies a £168 increase solely on the basis of the house name which is meters away. Nevertheless, there isn't much I can do and I will just have to take it on the chin. 

Arunmor

I suspect your mistake could have been running a new quote,I would have phoned them or gone online to sort it out that way.

jaykurb

Arunmor said:

I suspect your mistake could have been running a new quote,I would have phoned them or gone online to sort it out that way.

I still have access to said quote but I don’t have the option to call (they don’t do phone numbers) and I cant speak online unless I have an account. The only option I have is to take out the policy with the incorrect house number or to move on. 

Frozen_up_north

You could try going to companies that advertise stating they are not on comparison sites, unless you want to save money on cinema tickets and meals by going through those meerkat people.
FWIW, we save around £200 a year using the meerkat deals.

diveunderthebonnet

Frozen_up_north said:

You could try going to companies that advertise stating they are not on comparison sites, unless you want to save money on cinema tickets and meals by going through those meerkat people.
FWIW, we save around £200 a year using the meerkat deals.

Do you get cheaper insurance or do you mean that you save money by using the ticket and meal deals.

Frozen_up_north

We already used several of the establishments that offer the meerkat discounts, so without any effort we save a tidy sum. Obviously anyone not using the offers isn’t making a saving.