A RANT ABOUT CAR INSURANCE...

[Pete-M]

Even though i have protected no claims, What's the point of them if your premium still goes up?.

 

If you didn't have it, it would have gone up by a MFL more than £100...

[Negative Creep]

If you've had an accident, even non fault then you're statistically more likely to have another. Or at least that's the line from the insurance companies

[Alpineandy]

I did read the insurers are paying out something like £1.30 for every £1 they take in.

 

 

Yeah, I believe that one.

 

If you don't believe the truth, that's up to you.

[dollywobbler]

Pete - did you try classic policies for that Fiesta? At 25, I was paying £144 for a Rover 3500, and that was only 7 years ago. Paying about that for the Land Rover now, with unlimited mileage (though I do own other cars of course, which can be the issue - unless you simply buy more cars, £10k gets you quite a few!)

[Alpineandy]

First I have to say that I am not involved in car insurance as a broker or insurer, but I do have an involvement in an off-shoot of the 'insurance business' and therefore have a fair knowledge of the mechanics of it.

 

The cost is purely a mathmatical calculation based on history.

The maths can't be wrong but the history can be reported/recorded wrongly.

However If you'r in a high motor theft post code then you will pay more money.If you don't like it then move.

If you drive a fuel guzzler and don't like it, drive something different.

 

However I can't defend any claims issues or f*ckups etc. Because they do happen regularly.

The claims guys have to deal with the pond-scum of life and regretfully some of them do start to treat everyone like them.

If you have a claim, talk to them nicely and you may find the few good people there.

 

Purely from a profit / loss point of view, very very few insurance companies make a profit from motor insurance (I've got some figures somewhere - I'll post them if I can find them).

There is (or certainly was) an opt-out which involves you obtaining a bond/guarantee (can't remember the exact £ figure you need, but if it's £10m then expect to pay the bank more than £100k for it each year unless you can fully collateral it.... starts to make Insurance look cheap doesn't it!).

 

The problem is that on top of all the scams and un-insured drivers, most people claim for any minor knock (which we didn't when I was a new driver), and most people drive new cars (ok new'er cars) than at any time previously. Also repair costs are more expensive than ever before as nothing is repairable, it's all replacement parts and the manufacturer makes more money from replacement parts than from new cars.

Also, the ENCAP that's such a sales point means that a 30 mph accident disipates the force through the entire shell = the shell is F*cked.

Also one kid that's just passed his test can drive down the side of 5 or 6 cars in 70% of all residential areas and cause more financial damage than he'll pay in premium in his lifetime (when indexed).

God forbid he should hit a person!

 

Like ALL personal insurance, you should get a few quotes every year. Don't renew blindly.

If you run a big business then long term business relationships could make a difference to get a claim paid, but it doesn't make one iota of difference to us 'Joe Bloggs'.

 

I haven't noticed anyone post saying that the government should run car insurance, but someone will, so; All I can say to that is NO WAY.

It would cost 50% more and never pay a claim unless you were related to a politician or received special grants from the goverment for being a minority.

Only when you feel the DVLA gets up to minimun acceptable levels of competence is it worth considering that option.

 

Unfortunately this is a reasonable system which is abused by a few and results in the majority suffering.

[Alpineandy]

Tayne,

That's not quite true.

EUI do building/household (not sure what name they use for that).

Also for motor they are a coverholder only, not an insurance company. They don't retain any of the risk themselves.

The risk holder is great lakes insurance (the uk direct arm of Munich Re, the 2nd largest rinsurance company in the world).

 

Also the UK government tax any interest on money in reserve so their is little reason for them to keep the sinking fund (or claims not yet reported).

The 'claims not yet reported' amounts are audited carefully to ensure that they aren't unreasonable amounts compared to the past loss history.

Add into this that most liability amounts are't determined for many years.

Basically they can't keep extra money there which the goverment want them to turn into profit so they can tax it.

NU (like axa and zurich etc) make most of their money from life, pensions, endowments and the poor sod that doesn't shop around for his house insurance every year.

 

If Insurance companies were not taxed on reserves then insurance premiums would be much more stable.

How much do you think the floods up in hull (or was it grimsby....) cost a few years back (motor insurance wise).

 

When I was a new driver (30 years ago in a 12 year old car i bought maintained and insured myself) If I had reversed into a concrete post I'd have said 'It's my own fault, I won't claim for it', now they do claim for it because daddy was dumb enough to buy them a 2 year old yaris and pays for it's running/maintenance and insurance.

 

That's the problem with insurance. It gets expensive when people think of it as a business tool rather than emergency help.

This isn't helped by the sales people at these companies who think of it as the business tool...

[Minimad5]

Finally got a cheap quote £1200 /yr , with Footman James

 

Just need to gain a penny or two

(Blast for Pay Day being so far away)

 

... basically it pays to shop around

[warren t claim]

Finally got a cheap quote £1200 /yr , with Footman James

 

Just need to gain a penny or two

(Blast for Pay Day being so far away)

 

... basically it pays to shop around

 

What's the deposit needed for that?

[Alpineandy]

Here's what the AA said and they aren't known for fibbing to motorists;

 

MOTOR RATES SOAR IN THE UK

Insurers managed to push through the largest motor insurance rate increases last year since 1994, according to research from the UK's Automobile Association, which also has an insurance broking arm. AA said that the average Shoparound car insurance premium rose by more than a third last year to about £210. AA Insurance director Simon Douglas claimed that the industry had a loss ratio of 123% in 2009. He noted that a Commons inquiry into the rapid increase had shown to MPs that "premium increases have been fuelled by fraud; injury claims; exaggeration of claims; organized cash-for-crash scams; uninsured driving and poor investment returns because of the recession". Home insurance rates also went up, by an average of 10.2%.

 

or this one from deloitte and Chaucer;

UK MOTOR SECTOR REMAINS LOSS-MAKING, SAYS DELOITTE

The UK motor sector is set to make a loss of £1bn ($1.6bn) in 2010, according to research published today by accounting firm Deloitte. A decline in reserve releases from previous years, rising injury claim levels and pricing that is still too low are the causes, Deloitte says. Deloitte insurance partner James Rakow said that the only way that the sector could return to profit would be through "sustained rate increases" through to 2011. Deloitte expects prices to rise further, despite significant increases over the past 12 to 18 months. Deloitte insurance partner Ian Clark, insurance noted that "motor insurers are in a situation where they are not making money. Last year's results were poor across the sector and one of the key drivers of declining profitability has been the increase in bodily injury claims and the cost of replacement vehicles. Many motor insurers have been surprised by the increase in claims farming activity which has driven the growth in bodily injury claims. As an industry, the motor market needs to get the issue of personal injury claims under control, which could be helped by new legislation aimed at reducing the burden of these claims". Bruce Bartell, chief underwriting officer at Chaucer, told Insurance Day that "for those [insurers] that are starting from the right base - those that have reserving under control and whose incoming rates have integrity - the whole sector is looking at 2011 as being a good year". He attributed to the disastrous 2009 year, when the industry lost £1.6bn with a loss ratio of about 105%, to "a combination of fraud, escalating costs of credit hire and claims farming".

 

 

Sorry if this spoils anyones theories.

[Alpineandy]

I have to get up at silly o'clock tomorrow so I'll respond to the rest some other time but I have to take you up on this one;

I also refuse to believe that the government is adequately regulated what large financial companies are doing with their money. The events of the last few years have proved this.

 

Events in the banking industry have no relationship to insurance. Insurance is very much the poor relative of the financial industries. Nothing that's happened in the last fews years has proved anything negative about the UK insurance industry (as you suggest above). The only insurance issues in the last few years were the american company AIG and their move into investment banking/tie-in with Lehman brothers. UK Insurance had the big regulations shake up in the early 90s after the Lloyds of London problems (I'm sure you are aware that Lloyds of London insurance has nothing to do with Lloyds Bank). Since 2004 the fsa have over-regulated the insurance industry to it's knees. The required processes and compliance are now a major cost to you and me. You may have noticed that you get a ream of paper with your policy now - thats FSA insisting that we are treated like children, and guess who pays for the extra cost (not just, but mainly the customer). What's more is that there is a new europe wide insurance solvency regulation coming in which will put most insurance premiums up further. Having said this, the UK insurance business will be effected less than the rest of europe because our solvency regs are already too high.

 

There has been big growth in insurance as an investment opportunity since 11th september 2001 as the returns were very good compared to other businesses, but very few (outside the business) are investing in it now as the return on equity is so poor (compared to other investment opportunities). Hedge funds and pension investment will be going elsewhere for a few years to come. I expect a a number of mergers/belt tightenings in the near future and no real growth for 2/3 years minimum.

[Alpineandy]

a little bit more;

HORRORS AT LLOYDS'' MOTOR SYNDICATES CONTINUE

The much-publicized losses from UK motor in 2008 and later suffered by Insurance Australia Group (IAG) and others in the Lloyd's market have been highlighted by the failure to close the 2008 year of account for motor syndicates 218 and 260. Equity Syndicate Management's syndicate 218, the IAG operation, has a midpoint loss of 56% for 2008 (minus 30.5% for 2009 and minus 22.5% for 2010) and will remain open for at least another 12 months A cash call of 37.5% of capacity for 2008 and 17.5% of capacity for 2009 will be required, in order to meet the syndicate's funding requirements until mid-2012. At Canopius's syndicate 260 (managed until last year by KGM) the 2008 year of account will remain open, with a mid-point estimated loss of 38.2%, which will be called in full. The 2009 year of account has deteriorated to 33.6% midpoint, from 29.1%. A cash call is also expected for this, due for June payment. Argenta reported that the 2010 account was also likely to produce a loss, with a current mid-point loss forecast of 20% of capacity.

[autofive]

Here's an odd thing. I heard an advert for this on the radio today, and decided to take a look at their website - http://www.insurethebox.com uses a technology they call "telematics"

 

Basically, it is pay as you go motor insurance BUT you have a GPS/GPRS "black box" in the car which tells the insurer how far, fast, where and when you drive.

 

Now, I build these things myself for fun, but I don't like the idea of it telling anyone else what I'm up to... It's pitched at young drivers at the moment (as a price reducing gadget - "like a pay-as-you go phone" says the advert) but I'm wondering how long before you can't get insurance without having the box fitted.....

 

i tried, and failed, to get a quote from these muppets yesterday (not my name or address, but my email address) and this morning had 14 spam emails using the personal details i had supplied

[Mr_Bo11ox]

a little bit more;

HORRORS AT LLOYDS'' MOTOR SYNDICATES CONTINUE

The much-publicized losses from UK motor in 2008 and later suffered by Insurance Australia Group (IAG) and others in the Lloyd's market have been highlighted by the failure to close the 2008 year of account for motor syndicates 218 and 260. Equity Syndicate Management's syndicate 218, the IAG operation, has a midpoint loss of 56% for 2008 (minus 30.5% for 2009 and minus 22.5% for 2010) and will remain open for at least another 12 months A cash call of 37.5% of capacity for 2008 and 17.5% of capacity for 2009 will be required, in order to meet the syndicate's funding requirements until mid-2012. At Canopius's syndicate 260 (managed until last year by KGM) the 2008 year of account will remain open, with a mid-point estimated loss of 38.2%, which will be called in full. The 2009 year of account has deteriorated to 33.6% midpoint, from 29.1%. A cash call is also expected for this, due for June payment. Argenta reported that the 2010 account was also likely to produce a loss, with a current mid-point loss forecast of 20% of capacity.

 

^^^ Totally agree with this

[Alpineandy]

However I refuse to believe that the entire sector of the insurance industry doesn't make any money.

 

OK, a little more time now...

 

No one said that no company makes money from motor insurance, but it really has been very few for a few years now.

Between the extra cost of the idiot FSA compliance requirements and competition, most of them lose money. At first they didn't make an underwriting profit but could invest the premiums for long enough before paying claims, to make money from the pure investment. But now the underwriting losses are so big that few could make a profit even if the investment returns were good enough (but in the present economic situation, they aren't). I'm not suggesting anyone should feel sorry for them because they rip us off left, right and center on household, life, pensions and endowments but not on motor.

 

EUI are an exeption to the rule but don't miss that they make a lot of money by owning one of the comparison sites and getting a commission on all the business that goes through it. Check their web-site for all the other classes of insurance they do. The premium throughput from car insurance is a big % but I suspect the profit % from it is much smaller.

 

The crux of everyones dislike of motor insurance is that a few sh1ts out there are making the rest of us pay much more than we should do. Plus those same to55ers are making the insurance companies claims dept treat us like cheats when we have valid claims. If you really want to make a difference then you must report anyone that you know (or even suspect) of driving illegally to the police. It's a sad day when we all have to become teachers sneak just to get some justice but the pi55taking has gone beyond a joke.

[CIH]

I use to work in insurance and use to defend the companies but nowadays I hate the buggers. I had an likkle accident last year and was made to wait 6 months for the payout for no other reason than sheer beauracratic inertia and they knocked me down £300 at the last moment, despite agreeing the price initially

 

Fault claim, granted.

[Guest]

(slams door of XR2i)

 

Insurance costs?! Stupid, just stupid!

 

(later that day...)

 

I SAVED A PACKET!!

[Tonka]

My renewal for the Stagea and Skyline would have been £1035

 

I've gone with Admiral Multicar which saved me £325! so much that I added on my Fiesta too!

 

If I then add on what I pay for the two Jagos it means that for just £50 on top of what I was paying for the two imports alone I have all 5 insured, Result!

 

It still pains me to pay out just over a grand to insure them when we can only drive two at a time.....

[retrogeezer]

You might find with Admiral multi car that you premium will jump after a year or two....they did it to me.

Had 2 cars insured for about £500, took one off about half way through the year and got a £100 refund, renewal came through at £460 for one car!

Took insurance elsewhere for 2 years, re-insured same vehicle with Admiral last september for £250!

[Jon]

(slams door of XR2i)

 

Insurance costs?! Stupid, just stupid!

 

(later that day...)

 

I SAVED A PACKET!!

 

MEGALOLZ!! Loved that advert.