Insurance. What would we call fair?

[warren t claim]

As in the title, Should insurance companies be allowed to base premiums on age, sex, race and occupation?

[dollywobbler]

Life isn't fair. If you made a flat fee for insurance, that wouldn't be very fair for those who do sod all miles and never crash.

[Mr Lobster]

Should insurance companies be allowed to base premiums on age, sex, race and occupation?

 

Yes. Although the forums resident know-it-all-about-every-fuggin-subject contributors will probably say otherwise, premiums are based on risk and the liklihood of you costing them money. Some people are, for whatever reason higher risk than others so they pay more.

 

If everyone paid the same flat fee you can bet that 99% of people would be moaning when their price went up to subsidise some 17 year old who crashes into everything there is.

[Father Ted]

As in the title, Should insurance companies be allowed to base premiums on age, sex, race and occupation?

Yes, it always has been and is a reasonable way of assessing the risk. Insurance is all about risk after all.

 

The industry really needs to clamp down on litigation culture though, and I believe needs better regulation in regard to setting premiums.

 

How, I have no idea.

[RedSparrow]

I am more annoyed about the premuims based on location. You live in a not-great area because you don't earn much money (ie me) so you pay a lot more than if you lived in a more affulent area. I would be happy if it was based on age and past accidents only. Would be much fairer, to the customer anyway!

[AnthonyG]

EU sayz you can't base prices on sex (gender) now anyway.

[TimothyClaypole]

While I understand that younger/newly qualified drivers are more of a risk from the figures the actual prices are no better for most people anyway as it's all

driven by your no claims bonus/discount.

 

My van was £500 or therebouts - so figure in 9 years of discount that still means the initial premium was around £1800? It's just a con because you must have it and

they know it.

 

We are paying more because of their greed and the ridiculous money paid out for hire cars etc. that have been posted on here previously.

[Luxobarges_Are_Us]

Age is fair enough, because there is both a massive correlation between inexperience and accidents and it affects everyone equally. Plus, as Timothy said, it's not such an enormous factor once you take out the NCD. Certainly nowhere near the postcode-related differences.

 

Gender and race are not fair- you can't change them (well, unless you REALLY want to), and you can't be penalised for a genetic difference. The fact that there have been used historically doesn't mean that they are appropriate in a modern society. Marital status is also outrageous. If we think it's acceptable, why not add sexual orientation, too? Religion? Where does it stop?

 

I think that occupation should not influence premia, either- the list of occupations often is ridiculously long, a lot of people can't find the right one, and it makes bugger all difference to your likelihood of having an accident. If they want to exclude some high-risk occupations from theft and vandalism cover, that's OK by me, as long as they keep it away from basic insurance. Same goes for location- I understand that there may be less traffic to bump into out in the sticks, but there is absolutely no justification for charging someone an extra 30% just because their suburb is not as posh as the one down the road.

 

It's not so much an issue of inappropriate risk factors as one of lax regulation and dodgy market practices. The bundling of compulsory insurance with fire, theft, own damage, breakdown cover and whatever other bollocks needs to stop.

[HillmanImp]

EU sayz you can't base prices on sex (gender) now anyway.

 

Its not until 21st December this year, although they may well be beginning to factor it into their prices at the mo, I have not checked for a bit as have been doing other stuff for a bit. Fucking EU. Saying that, I am assuming there will still be an EU by then.

 

It was originally from a complaint about car insurance from some numpty with too much time on his hands but has ended up with it affecting nearly all forms of insurance in the UK. The bloke who originally complained will now get a much smaller annuity when he comes to draw his pension because they cant factor in the fact that as a man he is likely to die younger. So from December of next years your missus's car insurance will get slightly worse and yours will get better but when you come to annuitise you will see about a 2.5% drop and your wife will see about a 1% increase I reckon, as in each case the insurance company will make one sex pay for the additional risk posed by the other.

 

Re the postcode thing. That will mainly be a theft thing though, Shirley?

[Guest]

A £20 yearly premium and a hand job from Holly who works at Endsleigh.

[Luxobarges_Are_Us]

Re the postcode thing. That will mainly be a theft thing though, Shirley?

 

One would be inclined to think so, but it's nigh on impossible to find a policy that doesn't cover theft. Moreover, it couldn't possibly be it when you see no real difference setting the excess higher than the value of the car. Unless, that is, there's a juicy amount of cross-subsidy hidden somewhere in there- the shitist with the clapped-out Carina paying enough to cover the eventuality of a brand new company car getting stolen.

[HillmanImp]

I honestly don't know the answer to this but what happens if a car is stolen and is crashed into a load of other cars? Will my insurance company have to stump up for the damage or will the cars that were crashed into have to pay?

 

I have always thought that its not the value of the car you are insuring which is the main problem, its the damage you are liable to do to something else whilst driving it. If you have a high performance car you are more likely to bin it and cause lots of damage to something hence the higher premium. A second hand Focus ST will cost the same to replace as a new Focus Popular (I know they probably don't do them anymore but you get my drift) but you are just more likely to bin it and ruin someone else's day. As I say, I don't know if that is how it works, I have just always assumed its like that.

[Luxobarges_Are_Us]

Since policies are not vehicle-wide but specify named drivers, why would a thief be covered driving your car when a mate taking you to hospital after a stroke isn't? The thief is liable for the damage, if he can't pay or can't be found, it should be a case of uninsured losses.

 

The possibility of doing damage is, of course, higher when you're driving a powerful car, but this doesn't tally with the fact that adjacent neighbourhoods (or even different numbers on the same street) experience wild variations in premia!

[Cavcraft]

Should insurance companies be allowed to base premiums on age, sex, race and occupation?

 

Yes. Although the forums resident know-it-all-about-every-fuggin-subject contributors will probably say otherwise, premiums are based on risk and the liklihood of you costing them money. Some people are, for whatever reason higher risk than others so they pay more.

 

If everyone paid the same flat fee you can bet that 99% of people would be moaning when their price went up to subsidise some 17 year old who crashes into everything there is.

 

Agreed.

It pisses me off that it's going to cost my son probably £2,700+ to insure an old (small) shite car but that doesn't mean everyone else should pay towards it out of their premium.

[Mr Lobster]

what happens if a car is stolen and is crashed into a load of other cars? Will my insurance company have to stump up for the damage or will the cars that were crashed into have to pay?.

 

Yes, your insurance company pays as I understand it.

[Luxobarges_Are_Us]

I don't doubt they do 'as a matter of course', but there is no legal justification for that, and I don't think I've seen it written in any policy documents I've read (and I do tend to read all of the small print)...Same thing as getting the insurer of the at-fault party to pay for the increased premium of the innocent one- there is no case law on the matter (at least AFAIK), simply beause the insurance company know they haven't got much of a case and will pay up if threatened with legal action.

[CIH]

When my Manta was stolen years ago the local council helped themselves for the (no doubt inflated) cost to repair the bollard the thieving bastards had crashed into. That really pissed me off as it was no fault of mine but, clearly, it's easier to sting my insurance premiums than it was to catch the thieves and make them pay.

[The Moog]

One of the things with insurance is that it is built on statistical evidence. I would much rather this than just a random figure plucked out of the air..

[Luxobarges_Are_Us]

One of the things with insurance is that it is built on statistical evidence. I would much rather this than just a random figure plucked out of the air..

 

Come on, that's naive. Of course it's 'based on statistical evidence'. With said stats being held by each individual insurer, guarded as 'trade secrets' and not subject to any scrutiny (not even by a regulator on a confidential basis),how much confidence do you have that premia based on that extensive collection of statistics are made to represent an accurate estimate of the risk underwritten as opposed to being used as a means to a completely different end (e.g. loss-leading for cross-selling other insurance/financial products, relationship-building for corporate deals with carmakers by making old car owners pay for useless theft/own damage insurance to keep new cars insured for less)?

[maxustaxus]

It will be fair when insurance is optional, then we will have a real market place.

 

At present basic third party road traffic act insurance is next to impossible to get....all that is on top gets bundled in whether you like it or not and is not required by law.

 

The insurance industry has lobbied for, and got, a captive market that must buy insurance on pain of criminal sanction. Yet, all that is really needed in terms of compulsion is protection against death, serious injury and loss of earnings.

 

As tragic as serious cases are, these form only a small percentage of industry claims, most is for your run of the mill dents and thefts.

 

The serious cases could be covered by a levy on fuel with payouts administered via a body similar to the criminal compensation board, while If you want protection against the run of the mill stuff...TAKE OUT INSURANCE IF YOU WANT IT AND LEAVE THE REST OF US ALONE. There is no need for compulsion, no need to criminalize the poor, no need to run the poor of the road, and a whole industry of paper pushers creaming off their large percentage could be off spending their energies on more socially useful activities.

 

If you are afraid of others damaging your car....get cover yourself. That is how insurance works in every other area of life. People would drive more carefully, they would think twice before screwing the insurance companies for everything they can get, and the insurance industry would have to become competitive.

 

I know those who work in the insurance industry will squeal. Have you ever met a jobsworth that did not think they were doing an essential task? But the truth is the insurance industry has organized for itself a state monopoly based on PR, government lobbying, and fear mongering. Things do not have to be organized this way, and things certainly can't carry on as they are.