Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • SouthLondonUser
    • By SouthLondonUser 10th Apr 18, 6:12 PM
    • 539Posts
    • 78Thanks
    SouthLondonUser
    Why is comprehensive insurance often cheaper than TPFT ?
    • #1
    • 10th Apr 18, 6:12 PM
    Why is comprehensive insurance often cheaper than TPFT ? 10th Apr 18 at 6:12 PM
    (I am talking about cars; the opposite seems to be true, and not only in my experience, for motorcycles - which intuitively makes a lot of sense).

    The most common answer, mentioned multiple times on this forum, too (yes, I did search the forum before posting), is that many insurers view those who apply for TPFT only as riskier drivers. However, I don’t understand the logic. In this day and age, once you have a quote, be it from an insurer or from a comparison website, it typically takes just one click to check how the price would change between TPFT and comprehensive. I understand most people are lazy etc, but it takes one click only. Are there still many people who check for one type of insurance only?

    A comprehensive policy clearly exposes the insurer to the risk of paying much more. So why is it cheaper?

    Is it just a way to charge consumers more? As in, insurers have worked out that they’d be happy charging, say, £80 for TPFT and £100 for comprehensive, but they are charging £100 for comprehensive and £120 for TPFT in the hope that people won’t notice?

    Have they worked out that in most cases they can recover the extra costs from a third party? Eg the council, if an accident was caused by poorly maintained roads?

    I understand that the black-box pricing algorithms can spit out nonsensical results at an individual level (I have had prices varying by 30% from one day to the next, with tracker more expensive than without, etc), but AFAIK this (comprehensive being cheaper) does not seem an isolated case.

    Of course it’s just a curiosity with no practical implications, but I do wonder what the rationale is. Thoughts?
Page 1
    • AndyMc.....
    • By AndyMc..... 10th Apr 18, 7:04 PM
    • 2,078 Posts
    • 1,258 Thanks
    AndyMc.....
    • #2
    • 10th Apr 18, 7:04 PM
    • #2
    • 10th Apr 18, 7:04 PM
    The policyholders attitude to risk.
    • Norman Castle
    • By Norman Castle 10th Apr 18, 7:16 PM
    • 7,275 Posts
    • 6,044 Thanks
    Norman Castle
    • #3
    • 10th Apr 18, 7:16 PM
    • #3
    • 10th Apr 18, 7:16 PM
    TPFT is only sensible for low value cars. If the value is low or vehicle undervalued the driver may have little concern to protect their asset. A cheap car can cause as much damage as an expensive one.
    Don't harass a hippie. You'll get bad karma.

    Never trust a newbie with a rtb tale.
    • SouthLondonUser
    • By SouthLondonUser 10th Apr 18, 7:19 PM
    • 539 Posts
    • 78 Thanks
    SouthLondonUser
    • #4
    • 10th Apr 18, 7:19 PM
    • #4
    • 10th Apr 18, 7:19 PM
    @Andy, those who fit a tracker may be viewed as a different category from those who don’t, to the extent the former are deemed to live in more dangerous areas, which justifies the expense and the hassle of fitting a tracker. This might be a reason why sometimes having a tracker can result in more expensive insurance. But how can those who apply for TPFT and those who apply for comprehensive really be viewed as two different categories with different risk profiles and attitude to risk, when all it takes to “switch” from one category to the other is one click of the mouse? It would only make sense if most people had never thought of making the one mouse click that is needed to compare comprehensive vs TPFT. I genuinely do not understand it. Or am I missing something?
    • AndyMc.....
    • By AndyMc..... 10th Apr 18, 7:25 PM
    • 2,078 Posts
    • 1,258 Thanks
    AndyMc.....
    • #5
    • 10th Apr 18, 7:25 PM
    • #5
    • 10th Apr 18, 7:25 PM
    @Andy, those who fit a tracker may be viewed as a different category from those who don’t, to the extent the former are deemed to live in more dangerous areas, which justifies the expense and the hassle of fitting a tracker. This might be a reason why sometimes having a tracker can result in more expensive insurance. But how can those who apply for TPFT and those who apply for comprehensive really be viewed as two different categories with different risk profiles and attitude to risk, when all it takes to “switch” from one category to the other is one click of the mouse? It would only make sense if most people had never thought of making the one mouse click that is needed to compare comprehensive vs TPFT. I genuinely do not understand it. Or am I missing something?
    Originally posted by SouthLondonUser
    Yes, you are.
    • SouthLondonUser
    • By SouthLondonUser 10th Apr 18, 7:31 PM
    • 539 Posts
    • 78 Thanks
    SouthLondonUser
    • #6
    • 10th Apr 18, 7:31 PM
    • #6
    • 10th Apr 18, 7:31 PM
    @Andy, and what is it that I am missing? You mentioned different attitudes to risk but, like I said, I don't understand, since all it takes to go from the category of those applying for comprehensive to that of those applying for TPFT is one mouse click.

    @Norman, what you wrote might explain why insurers charge more for comprehensive than for TPFT on old, low value cars: the driver won't be very careful with the old piece of junk he's driving. But it doesn't explain why comprehensive is cheaper on other cars.
    • Ectophile
    • By Ectophile 10th Apr 18, 10:37 PM
    • 3,237 Posts
    • 2,090 Thanks
    Ectophile
    • #7
    • 10th Apr 18, 10:37 PM
    • #7
    • 10th Apr 18, 10:37 PM
    Fully comp insurance says "my car is valuable, and I want to look after it". TPFT says "my car is a heap of junk, and if I write it off I will just buy another one".

    But the insurers care far more about who or what you hit than they do about your car. For most motorists, if they write off their car, it will only cost the insurer a few hundreds or thousands of pounds. If they hit someone else, it could end up costing tens or hundreds of thousands in long-term injury claims.

    That's why many insurers prefer drivers who go fully comp, and also why they offer cheaper insurance for classic cars, members of car clubs and so on. Those people care more.
    If it sticks, force it.
    If it breaks, well it wasn't working right anyway.
    • SouthLondonUser
    • By SouthLondonUser 10th Apr 18, 11:08 PM
    • 539 Posts
    • 78 Thanks
    SouthLondonUser
    • #8
    • 10th Apr 18, 11:08 PM
    • #8
    • 10th Apr 18, 11:08 PM
    Fully comp insurance says "my car is valuable, and I want to look after it". TPFT says "my car is a heap of junk, and if I write it off I will just buy another one".
    Originally posted by Ectophile
    Again, moving from the category of "careless driver who drives a piece of junk and wants TPFT" to "careful prudent motorist who wants comprehensive" requires one click only. It's not an intrinsic characteristic that I cannot (easily) change, like living in rural Nowhereshire vs busy London, or having years of NCB, or being or not being 18 years old. I can understand insurers charging more for these; the difference is that an 18-year cannot say: "ah, this is the price for 18-year olds, that is the price for 40-year olds, I'll get the 40-year old price as it's lower". But anyone can compare comprehensive vs TPFT.

    Saying that applying for comprehensive signals you are a more careful driver would only work if it were impossible or very difficult and convoluted to compare comprehensive vs TPFT quotes, but it's not. Or if no one knew that comprehensive can be cheaper - but it's not exactly top secret information covered by the Official Secrets Act.
    • k12479
    • By k12479 10th Apr 18, 11:15 PM
    • 400 Posts
    • 661 Thanks
    k12479
    • #9
    • 10th Apr 18, 11:15 PM
    • #9
    • 10th Apr 18, 11:15 PM
    Fully comp insurance says "my car is valuable, and I want to look after it". TPFT says "my car is a heap of junk, and if I write it off I will just buy another one"....That's why many insurers prefer drivers who go fully comp...
    Originally posted by Ectophile
    The logic of that is all erm, logical, but as SouthLondonUser points out it still doesn't quite add up. A supermarket for money website says TPFT can still be cheaper if you're 40+ female/50+ male and have 5+ years NCD. In my own case I'm much younger than 50 and my lowest value car was £10 cheaper for TPFT, so for that I went FC.

    The biggest difference where FC is cheaper is for young drivers where it appears riskier drivers were trying to make costs more affordable by saving on insurance, so insurance cos. managed that risk my making TP/TPFT more expensive. But clicking different boxes on a quote doesn't change the risk, forgoing the say, Audi S3 for a regular A3 does.

    I wonder if TP/TPFT policies are dwindling and following a certain demographic to extinction or the increase in cars on finance is creating an anomaly.
    • Car 54
    • By Car 54 11th Apr 18, 9:13 AM
    • 3,192 Posts
    • 1,985 Thanks
    Car 54
    Could it be that with TP the insurers don't benefit from referral fees from accident managers, solicitors, recovery companies ....
    • LandyAndy
    • By LandyAndy 11th Apr 18, 11:07 AM
    • 24,379 Posts
    • 51,501 Thanks
    LandyAndy
    Insurers do it that way because their statistics tell them that it is the most profitable way to go.
    • SouthLondonUser
    • By SouthLondonUser 11th Apr 18, 11:24 AM
    • 539 Posts
    • 78 Thanks
    SouthLondonUser
    @LandyAndy, that's quite the tautology!

    @Car54, interesting thought, maybe that's it, although I would have thought that the damages covered by a comprehensive insurance would typically not be recoverable from third parties, and therefore there would be less scope to involve claim management companies and other similar gentlemen?
    • LandyAndy
    • By LandyAndy 11th Apr 18, 11:58 AM
    • 24,379 Posts
    • 51,501 Thanks
    LandyAndy
    @LandyAndy, that's quite the tautology!
    Originally posted by SouthLondonUser
    How is 'insurers do what they believe is most profitable' a tautology?
    • SouthLondonUser
    • By SouthLondonUser 11th Apr 18, 12:04 PM
    • 539 Posts
    • 78 Thanks
    SouthLondonUser
    Because the question was "why do they do it?" and you haven't answered it. They do it because they think it's more profitable, OK, but why do they think that? That's the question...
    • Car 54
    • By Car 54 11th Apr 18, 12:18 PM
    • 3,192 Posts
    • 1,985 Thanks
    Car 54
    @LandyAndy, that's quite the tautology!

    @Car54, interesting thought, maybe that's it, although I would have thought that the damages covered by a comprehensive insurance would typically not be recoverable from third parties, and therefore there would be less scope to involve claim management companies and other similar gentlemen?
    Originally posted by SouthLondonUser
    The TP is probably at fault in 50% of cases.
    • stator
    • By stator 11th Apr 18, 3:25 PM
    • 6,442 Posts
    • 4,295 Thanks
    stator
    When I first got a car, I insured TP only or TPFT and I don't think I bothered checking comprehensive policies. Back then it was harder though, don't think comparison sites existed. I changed to comprehensive once I had a car worth insuring. The idea that comprehensive policies might be cheaper wouldn't have crossed my mind until I read it on here.

    Some people say that it's because the insurers think they can sell you addons on a comprehensive policy. NCB protection, Motor legal etc. So they're willing to discount the price more. If you buy TPFT you're a cheapskate so they don't bother.
    Changing the world, one sarcastic comment at a time.
    • SouthLondonUser
    • By SouthLondonUser 11th Apr 18, 4:04 PM
    • 539 Posts
    • 78 Thanks
    SouthLondonUser
    When I first got a car, I insured TP only or TPFT and I don't think I bothered checking comprehensive policies. Back then it was harder though, don't think comparison sites existed.
    Originally posted by stator
    That was one of my points: the harder it is to compare comprehensive vs TPFT, the more motorists can be divided into 2 separate groups based on that. This probably used to be true once, but not now.
    Some people say that it's because the insurers think they can sell you addons on a comprehensive policy. NCB protection, Motor legal etc. So they're willing to discount the price more. If you buy TPFT you're a cheapskate so they don't bother.
    Originally posted by stator
    What addons can they sell to a comprehensive policy that they cannot sell to a TPFT? AFAIK NCB protection and legal cover (never worth it IMHO as you'll be assigned some cheap paralegal) can be sold to both.
    • stator
    • By stator 11th Apr 18, 4:14 PM
    • 6,442 Posts
    • 4,295 Thanks
    stator
    That was one of my points: the harder it is to compare comprehensive vs TPFT, the more motorists can be divided into 2 separate groups based on that. This probably used to be true once, but not now.

    What addons can they sell to a comprehensive policy that they cannot sell to a TPFT? AFAIK NCB protection and legal cover (never worth it IMHO as you'll be assigned some cheap paralegal) can be sold to both.
    Originally posted by SouthLondonUser
    It's not that they can't buy the add-ons, it's that they don't. People who are insuring TPFT are already scrimping, so take up of the add-ons is low.
    Also I bet most TPFT are renting and not home owning, so less opportunities to sell more policies like home insurance.
    So the insurers only have one chance to make a profit off TPFT, so they aren't willing to discount it.
    I don't know if it's true, but it's just a theory.
    Changing the world, one sarcastic comment at a time.
    • AndyMc.....
    • By AndyMc..... 11th Apr 18, 4:26 PM
    • 2,078 Posts
    • 1,258 Thanks
    AndyMc.....
    When I first got a car, I insured TP only or TPFT and I don't think I bothered checking comprehensive policies. Back then it was harder though, don't think comparison sites existed. I changed to comprehensive once I had a car worth insuring. The idea that comprehensive policies might be cheaper wouldn't have crossed my mind until I read it on here.

    Some people say that it's because the insurers think they can sell you addons on a comprehensive policy. NCB protection, Motor legal etc. So they're willing to discount the price more. If you buy TPFT you're a cheapskate so they don't bother.
    Originally posted by stator
    When did you pass your test? Given the World Wide Web was invented in 1991 it stand a very good chance there weren’t.
    • SouthLondonUser
    • By SouthLondonUser 11th Apr 18, 4:27 PM
    • 539 Posts
    • 78 Thanks
    SouthLondonUser
    But this would only work when the difference is small. E.g. an insurer charges £150 for TPFT, £130 for comprehensive, but then manages to sell £50 of add-ons to the comprehensive.

    I clearly cannot be sure how representative my case is, but family members and I have always been quoted £120 to £300 more for TPFT: this is a difference which is very hard to compensate by selling a few addons.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

103Posts Today

1,447Users online

Martin's Twitter
  • Ta ta... for now. This August, as I try and do every few yrs, I'm lucky enough to be taking a sabbatical. No work,? https://t.co/Xx4R3eLhFG

  • RT @lethalbrignull: @MartinSLewis I've been sitting here for a good while trying to decide my answer to this, feeling grateful for living i?

  • Early days but currently it's exactly 50 50 in liberality v democracy, with younger people more liberal, older more? https://t.co/YwJr4izuIj

  • Follow Martin