Car Insurance Rant

[Turkish]

sounding off about this! I have just got my new car, changed over the insurance no problem on mine, £20 admin fee, £35 additional premium. No problem

 

However Mrs Turkish has quite a different scenario. SHe is inherting my car, her current car is 7 insurance groups higher than mine so assumed the difference in premium would be minimal, possibly even less. We wnt to change the car over on the insurance and was told her premium was trebling for the final 4 payments of the 6 months left. If she wasn't happy she had two options, to cancel and go elsewhere and they would charge her £250 + £55 admin fee, she is 6 months into a policy which only cost £400 for the year Or she could take out a new premium which was still double than she pays at the moment.

 

Naturally we looked at other insurers and we found loads quoting a similar price to what she pays a the moment for her current vehicle, including believe it or not, her own current insurers!! When she rang them back and said about this they said this was a new offer that they didn't had access too and she couldn't have it without paying the cancellation fees on the old policy.

 

I am rarely "outraged" but i have to say i am at this blatently rip off tactic. The insurer is the RAC by the way. Avoid them.

[Redondo Saint]

Should Mrs Turkish really be driving?

[pap]

Can anyone remember the last time an insurance company went bust?

[Huffton]

Its not confined to the RAC unfortunately, the trade in general is run by thieving bastards. If the government stuck a few quid on road tax but included third party insurance they would have to become a bit more customer orientated, that and cut out some of the ambulance chasing...

[derry]

sounding off about this! I have just got my new car, changed over the insurance no problem on mine, £20 admin fee, £35 additional premium. No problem

 

However Mrs Turkish has quite a different scenario. SHe is inherting my car, her current car is 7 insurance groups higher than mine so assumed the difference in premium would be minimal, possibly even less. We wnt to change the car over on the insurance and was told her premium was trebling for the final 4 payments of the 6 months left. If she wasn't happy she had two options, to cancel and go elsewhere and they would charge her £250 + £55 admin fee, she is 6 months into a policy which only cost £400 for the year Or she could take out a new premium which was still double than she pays at the moment.

 

Naturally we looked at other insurers and we found loads quoting a similar price to what she pays a the moment for her current vehicle, including believe it or not, her own current insurers!! When she rang them back and said about this they said this was a new offer that they didn't had access too and she couldn't have it without paying the cancellation fees on the old policy.

 

I am rarely "outraged" but i have to say i am at this blatently rip off tactic. The insurer is the RAC by the way. Avoid them.

 

Last year my policy through RAC with Aviva didn't give fully comprehensive cover driving abroad, but If I took out a new policy and cancelled the existing one it would be automatically covered. The RAC girl waived the penalties (6 months left), cancelled the policy and took out a new one with Aviva identical but slightly cheaper.

 

 

Your wife's problem may be the new European non-discrimination law now not giving women favourable terms. Just a guess.

[bridge too far]

You're right, Derry. Risk is no longer the main driver if you will, as it was deemed to be unfavourable and unequal for men

[Window Cleaner]

Can anyone remember the last time an insurance company went bust?

 

there was a famous one in the 60/70s Savundra: Fire Auto and Marine

[pap]

there was a famous one in the 60/70s Savundra: Fire Auto and Marine

 

Cheers for that, Window Cleaner.

 

Anyone know of any more recent ones?

 

Look at the amount of firms in other sectors that have gone to the wall since the 70s. Good business if you're in it.

[John Boy Saint]

Its not confined to the RAC unfortunately, the trade in general is run by thieving bastards. If the government stuck a few quid on road tax but included third party insurance they would have to become a bit more customer orientated, that and cut out some of the ambulance chasing...

Do you really think they would become a bit more Customer orientated? Once a shyster always a shyster, and Insurance companies are the aces in the pack when it comes to Weaseling out of stuff: Leopards and Spots spring to mind. Premiums would still be Mickey Mouse as they would say "oh we have incurred extra costs due to administering the the road tax 3rd party insurance scheme".

Mind you mine is up for renewal and a broker phoned up to see if he could get me back, my car is used for my work travelling around the land, I have a renewal quote that I was surprised to see how low it was considering the acquisition of points and the slight argument with a tree back in Feb. This chap seemed transfixed by the use of my car for visiting customers as insurance companies like to know what's in the boot (Ah yes of course I am a hit Man normally in my boot you will find 2 high velocity snipers rifles, a roll of carpet and 1 sometimes 2 recent targets) I said some samples nothing much "so you have goods to sell from the boot of your car" No I have a few samples that I show to customers who might order, then someone else will deliver them in a big van. So you sell goods from the boot of your car, no I have samples that I show customers they have little or no value to me or the company after they have been sat in my car for 10k miles. But it still transporting goods in the boot of your car. Wow what a fixation that was bigger than the 6 points on my licence! Ok give me a minute (crappy Muzak). Rrriiiighhhht I have a few quotes and the best is with your current insurance company and that is £300 more!!!! than you have been quoted for. They all seem to have this thing about the transporting of goods in the back of your car.

 

It would be so nice to talk to an insurance company of any ilk without having to put your hands in your pockets to stop the scumbags yanking your trousers down to your ankles at the merest of opportunities.

[trousers]

Phone up their quotation line 60 times a day pretending to be someone else each time. After 15 minutes on the phone when they ask if you want to go ahead say: "no, I'm wasting your company's time until I've cost your company twice as as you're costing me". Repeat for as many days as necessary.

Edited 17 December, 2012 by trousers

[trousers]

Alternatively, introduce the death penalty for anyone who causes an accident and/or drives without insurance. That'll keep prices down.

[buctootim]

Its probably got a lot to do with the equalisation of insurance policies for men and women which has just come in. Womens motor insurance has gone up and mens has got cheaper. Mens permanent health insurance has got more expensive, womens cheaper.

http://www.thisismoney.co.uk/money/cars/article-2248278/Car-insurance-women-15-new-EU-gender-rules-kick-week.html?ito=feeds-newsxml

[Deano6]

Cheers for that, Window Cleaner.

 

Anyone know of any more recent ones?

 

Look at the amount of firms in other sectors that have gone to the wall since the 70s. Good business if you're in it.

 

It's a very well regulated market, and those regulations are only going to get stricter in the next couple of years when Solvency II comes in. The costs of entry into a market like this are very high and the profit margins in it are very squeezed by how competitive it is. That said pooling large quantities of vehicles makes results very predictable, and in the UK they are only really susceptible to concentrations of claims such as in big freezes or the recent UK floods.

 

On the point of insolvency, I guess you mean specifically UK motor insurers. There are plenty of examples of reinsurers going bust after a catastrophe like Katrina in 2005, life insurers going (Equitable Life in 2000 most famously) and of course pretty much all mortgage insurance companies after the financial crisis (eg FGIC, AMBAC, MBIA, Fanny Mae & Freddie Mac). Asbestos became a huge emerging issue in the 80s and wiped out many insurers, nearly taking down the whole of Lloyd's of London with it. In answer to your question, probably AIG in 2008 should have, but got bailed out by the Fed, though you will rightly argue it wasn't it's personal auto business that got it into trouble.

 

These days insurers do need to hold a lot of capital to guard against this happening (making it pretty expensive) and will also have a substantial amount of contingent capital they can call upon should they get into trouble. For these reasons they often die a "slow death" and will go into run off (cease writing new business) or be purchased by a competitor before they go bust completely, so don't make the headlines.

[Kenilworthy]

Renewed my insurance in November. After an accident free year in which my annual mileage dropped from 45,000 to 15,000 I was expecting the premium to stay the same or even be slightly less. In fact they wanted to charge £229 more. It took only a few minutes to find quotes that were less in themselves than this increase. The best turned out to be the RAC - who I had left the previous year because of their inflated costs on renewal. The insurance industry simply has no concept of maintaining customer loyalty

[pap]

It's a very well regulated market, and those regulations are only going to get stricter in the next couple of years when Solvency II comes in. The costs of entry into a market like this are very high and the profit margins in it are very squeezed by how competitive it is. That said pooling large quantities of vehicles makes results very predictable, and in the UK they are only really susceptible to concentrations of claims such as in big freezes or the recent UK floods.

 

On the point of insolvency, I guess you mean specifically UK motor insurers. There are plenty of examples of reinsurers going bust after a catastrophe like Katrina in 2005, life insurers going (Equitable Life in 2000 most famously) and of course pretty much all mortgage insurance companies after the financial crisis (eg FGIC, AMBAC, MBIA, Fanny Mae & Freddie Mac). Asbestos became a huge emerging issue in the 80s and wiped out many insurers, nearly taking down the whole of Lloyd's of London with it. In answer to your question, probably AIG in 2008 should have, but got bailed out by the Fed, though you will rightly argue it wasn't it's personal auto business that got it into trouble.

 

These days insurers do need to hold a lot of capital to guard against this happening (making it pretty expensive) and will also have a substantial amount of contingent capital they can call upon should they get into trouble. For these reasons they often die a "slow death" and will go into run off (cease writing new business) or be purchased by a competitor before they go bust completely, so don't make the headlines.

 

Cheers for this, deano6. I was trying to determine whether insurers face any risk; clearly they do. I think I'm perhaps guilty of projecting my personal experience with insurance onto the wider whole. I briefly worked for Comet; the famous extended warranty chain that just went bust. I also pay out a lot of car insurance, seemingly only to better my no-claims.

 

Do you know how granular the postcode algorithms are? My street is a good case in point. We live in a quiet cul-de-sac which is in the middle of a dodgy area. No-one comes down our street unless they live here, or are delivering something to someone who lives here. Crime is non-existent statistically, but I reckon my premium reflects the wider district.

[the stain]

Imagine getting all hot and bothered about something on a mongboard!

[Essruu]

Phone them and say you want to change cover to the 1980 Ford Mexico you've just bought. Oh... and it's had some suspension, brakes and engine modifications. Or, that you need to have your pals Gastòn Ramires and Rickie Lambert added to the policy.

 

They'll not want to insure either, so will have to give you a pro-rats refund ;-)

 

Then you're free to reinsure.

[Essruu]

*pro-rata

[Jonnyboy]

Can anyone remember the last time an insurance company went bust?

 

This!!!!!!!

 

Edit: just read rest of thread.

 

What about when's the last time a car insurance one went bust?

Edited 17 December, 2012 by Jonnyboy

[Jonnyboy]

Phone them and say you want to change cover to the 1980 Ford Mexico you've just bought. Oh... and it's had some suspension, brakes and engine modifications. Or, that you need to have your pals Gastòn Ramires and Rickie Lambert added to the policy.

 

They'll not want to insure either, so will have to give you a pro-rats refund ;-)

 

Then you're free to reinsure.

 

By the way Mr Essruu, I was on Cobden bridge today behind a white Ford Mustang with left hand drive, Gaston by any chance??

[Essruu]

Nope!

[Doctoroncall]

I was with Budget until recently, they hiked up the premium so went elsewhere. When I phoned to cancel they said they could do it cheaper through another insurance company!

 

So rather than find the cheapest quote for their customer they were willing to stick with the original insurance company and do no research and reap the benefit of the higher premium. Money grabbing bastards.

[Huffton]

Alternatively, introduce the death penalty for anyone who drives without insurance. .

 

Trousers for PM!

[Deano6]

Cheers for this, deano6. I was trying to determine whether insurers face any risk; clearly they do. I think I'm perhaps guilty of projecting my personal experience with insurance onto the wider whole. I briefly worked for Comet; the famous extended warranty chain that just went bust. I also pay out a lot of car insurance, seemingly only to better my no-claims.

 

Do you know how granular the postcode algorithms are? My street is a good case in point. We live in a quiet cul-de-sac which is in the middle of a dodgy area. No-one comes down our street unless they live here, or are delivering something to someone who lives here. Crime is non-existent statistically, but I reckon my premium reflects the wider district.

 

In theory they could go as granular as they want, especially with the advent of increasing computing power and statistical software packages making it far easier to run the models in a fraction of the time. In reality they tend to use postcode districts (ABXX, ignoring the last 3 digits after the 'space'). Any more granular than that and you are getting into spurious reliability and you don't really have enough historic data compiled to tell you anything useful - certainly not for the cost of how much more complex you are making it. So yes, you may be suffering for the area you live in, though there are other factors taken into account such as occupation, whether you keep it in a garage or on the street etc...

 

Even then, there's about 3,000 postcode districts which is too many to handle, so each gets given a rating on a particular scale, as determined by each insurer. Typically an insurer will use between 10 and 20 such categories, and these ratings will lead to a "multiplier" factor being applied that could increase your premium 2-3 times from the lowest (safest) possible. One such ranking scale is ACORN, which allocates districts to around 50 socio-economic classes (you can even take a free lookup trial on their website to see how your district performs if you register, I believe).

 

For an interesting high-level look of how your district ranks, see here. I'm not sure what the source of their data is, every insurer will be different, but it gives you a flavour for the kind of work that is done.

 

And if you are interested in looking into this a bit more (in between your moon-based research ), this presentation has some good info and is an easy read.

[Wilko]

Recently moved house, about 1/2 mile away, to a quieter road in the same post code area, with a private locked garage parking space 50 yards away from the road. Admiral said my premium would increase by £25 per year. They just make it up as they go along.

[Jillyanne]

Should Mrs Turkish really be driving?

 

Yes Bennetts in Beastleigh