Insurance costs

[scooters]

Modern cars costing more to repair

 

The insurance industry keep banging that one out but the fact is they only have themselves to blame - they agree a fixed price matrix with their approved repairers which is a good 30% more expensive than it should be -

 

example - I drove the 850 into the side of an A3 in the snow - very low speed and the A3 ended up with a scratch to the rear wing and a broken light cluster...The cluster can be bought for £30 and the scratch could be touched up without any issue as there was no damage to the metal.

 

The other party took it to the repair shop suggested by their insurer who quotes £675 for the work based around replacing the wing, painting it and replacing the light cluster and labour. These figures are what the suppliers have agreed with the industry as standard and the industry replaces rather than repairs by default.

 

I told him to eff orf and to run a quote based on me paying and it came in at £175 all in. So where does the £500 come from???

 

it is a huge racket and given the legal requirement for us to have insurance central govt should look carefully at the relationship between repair shops and the insurance companies. The insurers always claim there is no money in cars ....well, if they run their businesses like that with arbitary settlement figures rather than an open market thaen what the feck do they expect. Sadly it is the motorist who gets stiffed on cost ....but thats where your premiums are going

[Luxobarges_Are_Us]

That's it...and you have to add hire car costs on top...They probably pay 60 quid a day for a Ka, when anyone can walk into a Sixt/Hertz/Avis office and get a Passat for 35-37...it's all about massaging the figures- you can be certain that they have either a massive hidden "discount" at the end of the year or, better still, a "special corporate relationship" with (if not controlling interest in) the "approved repairers" etc.

[Negative Creep]

Modern cars costing more to repair

 

The insurance industry keep banging that one out but the fact is they only have themselves to blame - they agree a fixed price matrix with their approved repairers which is a good 30% more expensive than it should be -

 

example - I drove the 850 into the side of an A3 in the snow - very low speed and the A3 ended up with a scratch to the rear wing and a broken light cluster...The cluster can be bought for £30 and the scratch could be touched up without any issue as there was no damage to the metal.

 

The other party took it to the repair shop suggested by their insurer who quotes £675 for the work based around replacing the wing, painting it and replacing the light cluster and labour. These figures are what the suppliers have agreed with the industry as standard and the industry replaces rather than repairs by default.

 

I told him to eff orf and to run a quote based on me paying and it came in at £175 all in. So where does the £500 come from???

 

it is a huge racket and given the legal requirement for us to have insurance central govt should look carefully at the relationship between repair shops and the insurance companies. The insurers always claim there is no money in cars ....well, if they run their businesses like that with arbitary settlement figures rather than an open market thaen what the feck do they expect. Sadly it is the motorist who gets stiffed on cost ....but thats where your premiums are going

 

 

Is it not also to do with modern crumple zones? The front is designed to take the force of the impact thus a low speed shunt will require a lot of things to be replaced, including any deployed airbags. I don't know if anyone else saw the story of the GTR that hit someone's towbar which caused the pedestrian impact system to go off. Ended up costing about £11,000 to repair

[Pillock]

 

I told him to eff orf and to run a quote based on me paying and it came in at £175 all in. So where does the £500 come from???

 

It comes from the fact they know an insurance company are paying.

My local bodyshop is at least honest about this fact - if I take anything to him, he asks if it's for an insurance quote or a personal job and prices accordingly. Personal repairs get s/hand parts and a certain labour charge, insurance jobs get quoted for new parts and a higher hourly rate - because they'll pay it.

[Alpineandy]

Sorry, I've a stinking cold so I have to break this into smaller bits to get my head around.

 

So you want to buy a nice little carton of strawberries.......AND THIS IS NOT A BLOODY CARTEL??

 

It's not a cartel. It is law that you have to buy motor insurance, but the insurance companies don't work together to keep the prices high. If they did then they'd all make a big profit (which I'll deal with in another post).

 

In America a senator called spitzer (i think) won mega support from the public by picking up on a few insurance companies & brokers that worked together on certain industrial accounts to supposedly keep the prices high (a cartel) but after he lost all support (when the public found that unbeknown to his wife and family he had a taste for hookers) most of the fines were reduced dramatically because they prooved that although they colluded, they actually weren't notable overpricing. The Brokers did get fined (nominally) for showing preference to those insurance companies because they got a bigger commission. This system was banned but is now legal again as they showed that the insured didn't get a worse deal than if other insurance companies had written their business. They now have to prove that they've prices it from a number of companies.

Really, Insurance companies may 'benchmark' their prices aganst others to make sure they haven't left loopholes in their system and the senior claims guys often know each other as they have to interact on the knock for knock business. They are genuinely competeing against each other (even some of the companies that have the same owners).

 

There are lots of things wrong with the system but it's not a cartel.

[Alpineandy]

If it was really a cartel then I'm pretty certain they'd have fixed it so that they alway make a profit, and they don't. [Most (NOT ALL!) haven't made any profit from motor insurance for quiet a few years

 

How do we know that? Do you have access to the entire set of itemised, audited figures for every aspect relating to motor insurance and ancillary items (e.g. courtesy car cover)? Does ANYONE have access to these figures? I would love to see them!

 

The info is available. Yes I've seen much of it. It is audited. There are a few companies that do make money on motor business, but very very few (IIRC only 2 in 2009). Really, most insurance companies are having a tough time due to the many catastrophes around the world - Not necessarily losing money buy hardly makinga any. If we hadn't had the floods in 2009 then a few more would have made money from motor. The consistent profit is made in the life/pensions sector where they charge no matter what they're investmensts have done. Household/warranty/payment cover etc is pretty good most of the time as well.

[Alpineandy]

but do it because they want your household-life-pension etc business where the real profits are made.

Now you really are on to something. Would it be a stretch to assume that a single 25 year old guy is LESS likely to buy any of the above crap than a 42 y.o. married mom-of-three? Is there anyone who can guarantee under oath that the former customer isn't charged a little bit more in order to make the latter's loss-leading premium more attractive, so that the insurer can rape her with some industrial-scale cross-selling?

 

It's possible but unlikely. It certainly wouldn't have as much effect as your fellow single 25 year olds claims histories.

[Alpineandy]

The ambulance chasers are slimey bastards, but they are not stupid enough to make a claim for something that plainly isn't covered. A standard-issue e-mail is the only thing the insurance company has to do in order to explain whatever needs to be explained. If the customer keeps calling every day etc, they can still have a schedule of time-based fees to be demanded from persistent numbskulls.

 

I think you're being generous towards the ambulance chasers. They'll be quite happy to send a standard letter knowing that if the insurance company don't respond in exactly the correct manner then they may be able to wedge that door open.

And the number of letters sent is scarey.

 

I really can't see how they can charge someone that probably will not renew their cover an extra charge.

[Alpineandy]

The mere fact that they are allowed to charge you more for having the "wrong" gender, marital status or job title

Taking these crireria out of the deal would result in most peoples insurance increasing dramatically. -I suspect that if it wasn't for this then every insurance company would charge the same price and they'd all be much more expensive.

 

Why do you think so? Why don't you check what happens in other EU countries, in most of which these things aren't factored into one's premium?

 

In most (I think I could say 'all') other countries they don't have the very high number of claims that we do in the UK.

Generally the standard of driving on our 'most congested roads in europe' is very poor.

 

I'm rather out of touch on overseas systems now but I'm pretty certain that some (if not all) do use a fair proportion of this criteria for their pricing.

[Alpineandy]

You just have to chase around for the one which doens't have bad experiences of your occupation etc.

 

I shouldn't have to do that, not so much because I'm lazy (which I admittedly am), but because it doesn't make any sense. In fact, what it does do is point to dodgy use of statistics- I mean, imagine being a cryogenetics engineer and talking to an insurer who had 2 cryogenetic engineer customers who both crashed their cars.

 

That's far to specific an occupation. I assume that a cryogenetic engineer is either a scientist or an engineer (please correct me if i'm wrong), and that's how they'd be grouped.

 

As for you being lazy, that's what having a market is all about. You go out and look for the best/cheapest or be lazy and get what's given to you. They want everyone to be lazy because that's how they sneak the prices up (or don't give the discounts that they should) and make any money on motor insurance.

Although there seems to be the business intention of all (at least most) to make a profit on the business in future without such things now.

[Alpineandy]

Again, see how it's done in Europe. Maybe the "average premium" is only a little bit cheaper than the UK, but the distribution is much more logical, and drivers don't have to pay 3 grand to insure a rustbucket simply because they have no experience, or still have to spend 800 quid for a medium-sized car after 5 years of claim-free driving ("FULL NO CLAIMS BONUS" my arse!).

 

I don't know how the mathematicians work, but I can guarantee you that, even if most of what they do is sensible, their work will be altered to uselessness by marketing guys and "senior executives" who wouldn't know a fraction if it hit them on the head.

 

The price goes back to claims. You may have a clean license with no claims, but there are plenty that don't.

 

I'm not certain about german claims anymore but at one time they had much much less claims than us but those claims tended to have bigger values (as they tended to be higher speed) but I'd guess that the smaller claims we have now equal a far larger portion being written off due to 'passenger cell' damage thanks to the encap crumple car system.

Plus their TUV system wouldn't allow a quarter of the cars on UK roads.

Also the standard of driving across europe is reducing but is generally far higher than here on our most congested roads.

 

The marketing guys do have some input but generally it's only aesthetic. You may find that they're willing to give a 5% discount to a 42 year old to get their other business (as you previously suggested) and they may even add that 5% discount onto the 25 year old (as you suggested) but the effect that has on the 25 year olds premium is effected much more by 25 years olds accidents. In the comming years the 5% discount is more likely to become a 'don't add the 5% mark up'.

[Alpineandy]

IWhile the government would definitely cock it up even worse if they were to run it, I think that more government involvement is called for. And the solution is very simple: De-bundle the third-party bit (i.e. the insurance required by law) from the additional covers (purely a matter of consumer choice), and put a cap on the price that can be charged for it (unless insuring proven high risks e.g. convicted drink-drivers and those with more than 3-4 claims in 5 years), maybe staggering it across age groups...e.g. a maximum TPO premium of 1200 quid for under 21s, 800 for under 27s, and 400 for everyone else.

In theory the government are involved via the FSA.

As for unbundling it, yes that would be a good idea, but the price cap is unworkable.

Anyone can drive down the side of a dozen cars on any housing estate and cause over £50k worth of damage to other peoples cars. So if you can do that 2 times in 5 years and still not be penalised for it, how can it work?

 

 

If it really is so unprofitable for them, they can just quit the entire business and foreign insurers (who already do things cheaper) will come and take their place. When I can get everything else so cheap from China, why does the government force me to buy a particular product from Cheshire?

 

A company in china is perfectly able to set up a UK company to do that, but the problem is that they can't see much benefit / profit in it at the moment. We already have almost all EEC countries/swiss/usa/indian insurance companies here.

If the govenment don't insist on licensing the insurance companies in UK/EEC then I'll set one up from liberia, collect all the premium, close before i have to pay the claims and open a new one in trinidad etc etc

[Alpineandy]

There are plenty of things wrong with the UK motor insurance system but it's just a goverment regulated business like many others. The problem is that the only time anyone needs it is when they need a claim paid.

It saves people from a life of misery like the person that got knocked over by the boy racer and now needs special care.

The usually safe driver that hit the 5 year old when he ran into the road without looking - and the parents have made their mind up that it's his fault not the kids, even though he was doing 10MPH they know he was doing 50MPH. He'd have to sell his house etc etc without the insurance to cover him.

In small businesses it's paid for the boss to have replacement transport (or whatever) so that he can get there and without him others would be unemployed.

 

But equally it does tend work to the lowest common denominator. Because one guy is a low-life scumbag that wants to claim for the laptop he never had or the whiplash he didn't get, then we're mostly all viewed as scroungers/crooks.

 

When a better system comes along then we should grab it with both hands, but I've yet to see one that the public would be happy to pay for. We all want it for free.

[maxustaxus]

The insurance industry operates within a skewed market place because it has a government endorsed captive market, one which incidentally no one here had any vote on. This effective protection racket belongs to a different time, when the state would not support a worker maimed for life. That is no longer true, yet the cosy relationship between the insurance industry and the legislators continues despite the cost to ordinary motorists. It is time for a radical overhaul.

 

And as for the point regarding there being no better system....it is not for those who suffer under a system gone foul to provide a better alternative at the outset before making complaint. Much as I should not have to find a mugger something better to do in order to ask them to stop! The insurance industry has grown fat and greedy on the back of a guaranteed market place....you MUST buy car insurance from somebody, whether you need as much of it as offered or not.

 

The car insurance market place works in the interests of the insurance industry as a whole, and extreme examples of how this or that child was knocked over and tragedy followed does not alter the fact that a whole layer of service is forced upon people at pain of criminal sanction, whether they want it or not. Indeed, a case could be made that it is up to you to insure yourself against any third party risk that you cannot afford to take and that the criminal law has no part to play, that is how private insurance works in almost all other areas of life (many people would probably drive much more safely and cautiously if this were so given their personal liability).

 

Anyway, whichever way you look at it, only those most proximal to rife industry propaganda, or those that have some vested interest in its monopoly by association could pretend that the current regulation of car insurance works for the benefit the average motorist...it does not. It works in the interests of a powerful sector that has the government in its pocket and the people under its spell. It over sells a product under pain of criminal sanction to the ordinary motorist while fear mongering about where we would all be without it in this form. Well I for one think this is wrong in 2011 and don't mind saying so.

[Alpineandy]

The insurance industry operates within a skewed market place because it has a government endorsed captive market

I'm pretty certain that there is an alternative (there certainly was). IIRC you can post a guarantee with the DVLA. I think they wanted a £10m guarantee, but even if it's only 1m, you check with your bank how much they'll charge you for an unsecured guarantee for £1m! You'll then understand that car insurance is cheap by comparison.

 

And as for the point regarding there being no better system.....

As usual someone thinks the system is wrong but absolves themselves of putting it right.

You sound like an 'ecomentalist with the 'close all power stations' line, but no suggestion of how we'd all survive without them.

 

The car insurance market place works in the interests of the insurance industry as a whole,...... .

It is a business and is supposed to make a profit, but has rarely done so from this business line in the past. Just because they're trying to change that, everyone moans. They should really be moaning about the fraudsters and the poor standard of driving which makes this so bloody expensive. When the car insurance market starts to consistently make a profit then we can all start complaining but until that happens they can clearly justify price increases. It's like moaning that milk is too expensive when the farmer is losing money on milk but surviving on the sale of beef.

 

many people would probably drive much more safely and cautiously if this were so given their personal liability. .

But many wouldn't change their driving at all. Accidents would still happen. So what happens then?

 

Well I for one think this is wrong in 2011 and don't mind saying so.

Thank god you're here for such insightful comments.

[Guest]

Car insurance is expensive because anyone can say their neck hurts and get a sick note. The end!

[Inspector Morose]

You put it in the most succinct way possible Hirst.

[maxustaxus]

Sometimes quote and quibble fails to get to the heart of an issue....Alpineandy, I refer you to the issues of substance made in my previous post, including....

 

 

whichever way you look at it, only those most proximal to rife industry propaganda, or those that have some vested interest in its monopoly by association could pretend that the current regulation of car insurance works for the benefit the average motorist...it does not.

[Guest]

Tory birch shoes - all-natural footwear which leans to the right.

[Luxobarges_Are_Us]

maxustaxus has got it right. I will try replying to Andy's post in the next couple of days, but that's the whole point.

 

Incidentally, today I was trying a few dummy quotes for different addresses. Keeping both car and driver details constant, the same insurer wanted 640 pounds for an average part of Luton (hardly a low-risk area) and 2270 for a flat near the centre of Bradford (probably higher risk, but not that bad really, it's not a big city after all)!! Incidentally, the price went back down to about 750 for a Bradford suburb a couple of miles down the road. I'm not going to argue with anyone that says that I'm THREE TIMES more likely to cause an accident (the value I entered for the car was lower than the excess I chose, so it was effectively a third-party-only policy even if not labelled as such) if I live in neighbourhood A instead of the adjoining neighbourhood B- I will just recommend them to have a quick word with the local friendly psychiatrist.

[Guest]

Bradford used to be the UK's car insurance fraud capital, still in the top 10 I believe. That'll be why!

[HillmanImp]

Well, I got the renewal though for the Scenic the other week and it had gone up by 33% to a whopping £575. The insurance company can go fuck themselves if they think I am paying that. Its more than I was paying when I was 17.

 

Was looking at the XR3i's as you know on the other thread but the chap with the one I liked did not get back to me. In the meantime though, M'coli got in touch offering me his Saaaaaaab (previously owned by Dollywobbler) and a deal was done. Whacked it on my classic policy for an extra £40 with unlimited mileage. A saving of £535 on insurance plus whatever I get for the Scenic on e-bay less the cost of the Saaaaaaaab.

 

If insurance prices are going to continue to be this gay I think I will be sticking to classics (or old bangers depending on your viewpoint, or if you are my neighbour, but thats something for the other thread) in the future. You could probably get an early Xantia on some classic policies now which would be very nice.

 

Incidentally I am still looking for an XR3i or something if one turns up but I am only putting my hands in my pocket for something I REALLY like. At the moment I am very happy with the Saaaaaaaab so will be sticking to that for the time being. HOW BIG IS THE FUCKING BOOT ON THESE THINGS? Could easily stick 2 or 3 dead bodies in the back.

 

Hows that information for you Sarah Coles? Did you like that?

[Guest Leonard Hatred]

I notice some classic car insurers have moved from a 15 to a 25 year cap.

[Rocket88]

One advantage of living over here.............17 year old, just passed test, £560 third party on a Punto 1.2.......

[Pillock]

Hey Sarah Coles, I've got 11 INCHES OF THROBBING INFORMATION FOR YOU. PURPLE VEINY INFORMATION.

 

In other news, I've just tried Greenlight for a Golf GTTDI and they beat previous best by £150. They're heavily advertised in the Golf forums. I guess it just pays to shop around, endlessly trawling the internet typing the same information into sites, repeating the same stuff down the phone, every single god damn year. *sigh*.

 

It's still shit, just slightly cheaper shit.

[Alpineandy]

Alpineandy, I refer you to the issues of substance made in my previous post, including....

 

If you're suggesting that I'm in anyway directly or indirectly involved in motor insurance then that's another point you're wrong about. I have no connection at all with motor, household, life insurance or pensions (other than being a customer). I'm only commenting on here because there's so much rubbish and ill informed guess workmentioned. Insurance is a simple idea (which I do understand and am involved in reasonabley successfully) about collecting a 'little premium' from many to pay for the 'few claims'. Unfortunately the 'few claims' isn't, It's now a lot of claims and rarely does the premium of the many cover it - Full stop!

Moan however much you want but it doesn't change the maths.

[Tayne]

.

[barefoot]

Just a quick cat amongst the pigeons.

 

The first car I insured was in 1984, it was a '78 Chevette.

Obviously back then it was proper 3PF&T girlfriend on the policy and business use!

A stonking £156 - and that was a LOT.

 

The most recent car I insured was an '87 Scirocco.

Comprehensive, wife, business use, but also a bit of NCD.

A curious £150 - and that was not a lot.

[Luxobarges_Are_Us]

Bradford used to be the UK's car insurance fraud capital, still in the top 10 I believe. That'll be why!

 

Yes, but that still doesn't explain why the quote for the Bradford suburb is only a third of that for the centre of Bradford. We really are talking about a distance under 3 miles, about 10-12' by car or just over half an hour's walk.

[Luxobarges_Are_Us]

Moan however much you want but it doesn't change the maths.

 

For examples of the "maths" that can't "change", and before you put the blame on the policyholders, see earlier on this thread where insurers inflate claims to absurd levels, apparently just for the fun of it (or, as someone more cynical than I would say, for a nice backhander from the "approved repairers").