Insurance costs

[Pillock]

2001 Leon TDI. Group 7.

 

Morethan, who were the cheapest for my 1999 Vectra SRI (don't judge me.....) have quoted £1,520 for it. This is daft.

[trigger]

I had the cob on cause i was paying £550 fully comp for the Mondeo ST!, the wife pays £300 for the Escort which is as much as we paid for it! (mind you that is also fully comp with breakdown cover which we need to change).

[Mr_Bo11ox]

I'm telling you man, we're all just paying for a massive merry-go round of twats making money out of maximising claims in all conceivable ways. bodyshops, car hire companies, solicitors, even the insurance companies themselves believe it or not, the whole lot is a bent as a £4 note.

[Alpineandy]

So what do you do Andy?

All that seems very carefully worded, are you an ambulance chasing lawyer?

 

I'm involved in major international industrial property cover (no UK domiciled clients).

My main risk has a value of €62,000,000,000 and I work within a team that handles some even larger accounts.

My smallest risk is a charity in Afghanistan which is valued over $25m.

All these guys have deductibles/excesses greater than the value of the average new UK car.

 

And I'm not defending how the motor insurers breakdown the rates across postcodes etc because they do definitley make mistakes but it's as I.T. guys say, rubbish data in = rubbish out.

But at the end of the day, if they don't make a profit then they aren't charging enough premium.

[Alpineandy]

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").

 

Concerning the 'inflated claims', unfortunately a large portion (not all!) of this comes back to the victim of the accident. The poor guy expects indemnity (to end up in the same position after the claim as prior to the claim) - rightly so!. Because of the media most 'non-car' people know an accident repaired car is less valuable than a car with no accidents. So they want their car repaired to the very best standard with genuine parts. Because they don't know what is a properly repaired car they only judge this on the cost of the repair. Yes it's illogical but that is the mentality. The garages quickly worked out that assessors couldn't be everywhere (and they probably responded to a nice 'corporate event' etc as well) so they use the 'book' time for any repair and charge the full panel prices. they also worked out that their business can survive (or prosper even) on insurance money alone. But they don't like turning away business, so they're more likely to charge actual time and give discounts on parts etc on private jobs. If you do the job then your competitors can't - even if you don't make money on it.

There may well be 'back-handers' involved on an annual basis (a £500 or 1k Xmas box or some jolly) although nothing has ever been proved to me and I'm not aware of anyone ever being caught doing this, but they would definitly lose their job if anything was proven..

But again, that 1k is a tiny portion of the claims costs going through any garage and the overall effect on the total claims for a year would be negligable.

The cost of sending an Insurance assessor to inspect every insurance claim would increase premiums even higher. There comes a point where the extra expense would outweigh the claim costs and everyone would moan that they should trust some people.

 

Bear in mind that most larger insurance companies don't want any 'reflected' (or 'by association') problems from their repairers, so they insist that their recommended repairers are up to certain standards which includes health and safety etc, so all the changes from cellulose to modern waterbased paint/ventilation systems etc have been forced through by governments knowing that insurance will pay for it!

 

I can't give exact figures right now (because I can't be bothered chasing through my systems for them right now.... I'll try to find some time to do it tomorrow)) but they are audited in great detail by accountants. The government love taxing insurance companies (another reason UK insurance is expensive plus Insurance Premium Tax) and the company would be fined by both the government and the FSA (soon to be replaced by the Bank of England insurance dept).

It really isn't worth them trying any 'creative' accounting.

[garethj]

My main risk has a value of €62,000,000,000

So buying an A310 is relatively risk free?

[Guest]

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.

Best thing to do is look at a Vehicle Crime map (Beatcrime.info was good last time I checked). If you look at a suburb there'll be a few dots here and there, when you look at the average city centre it'll be like a clusterbomb. I'm only about a mile from Wakefield city centre, if I parked the Galant there overnight it would be gone/destroyed within the month easy.

[Guest]

I'm telling you man, we're all just paying for a massive merry-go round of twats making money out of maximising claims in all conceivable ways. bodyshops, car hire companies, solicitors, even the insurance companies themselves believe it or not, the whole lot is a bent as a £4 note.

This is basically the sum-up of it - there's no incentive for anyone involved to do anything cheaply. You could scrape the door of the most knackered Mondeo in existence and - if the claimant insisted it must be done - it'd be completely alright for their insurer to price up a brand new door and rubbing strip from Ford, get it painted at a proper bodyshop and give them a £60/day hire car whilst it's gone. It's all very well for everything to be restored to "pre-accident condition" with no inconvenience whatsoever to the affected party, but the bottom line is that we can only do that if everyone pays an absurd amount into the big pot of money it all gets drained out of.

[Alpineandy]

Wasn't Enron audited by accountants for many years before all the false accounting did for them?

1) they were audited by american accountants

2) most auditors are only doing the audit job because they hope they can get a decent accounting job out of it, and no one with any sense wants to be an accountant at an insurance company! I can assure you that accountants don't give insurance companies an easy time as they're one of the few businesses that even the junior auditors look down upon

[Luxobarges_Are_Us]

Because of the media most 'non-car' people know an accident repaired car is less valuable than a car with no accidents. So they want their car repaired to the very best standard with genuine parts. Because they don't know what is a properly repaired car they only judge this on the cost of the repair. Yes it's illogical but that is the mentality.

 

Isn't that the reason why we (the taxpayers) are paying for those big buildings called "courts" and the "judges" therein who can accept testimony from "experts" and are expected to apply "reasonableness" tests? You can't just concede the fact that something is illogical and at the same time tell us that "the maths can't change" and that "there is no better system"- you are just contradicting yourself!

 

A little example from Greece (sorry, I only have knowledge of car insurance in 3-4 countries, so I can't give you a big variety) on the side of claims costs is that the insurer is allowed to apply a % of depreciation on the RRP of a genuine new part, which means that the job often needs to include pattern and/or secondhand parts. It is up to the claimant (and/or their solicitors, if involved) to prove that said parts won't bring the car to the pre-accident condition. As you can imagine, this little difference in insurance practice does wonders both for premium levels (to some extent) and for avoiding write-offs of perfectly good cars for minor damage (to a MASSIVE extent). Is this "no better" than the UK system of the inflated claims culture?

[Alpineandy]

"the maths can't change" and that "there is no better system"- you are just contradicting yourself!

No I'm not. the maths is simply = X (premium) + y (policy costs) >(must be less than) z (claims inc claims costs).

You can define x more fully as - x (premium including interest earned) if you really want to.

The maths doesn't change but you're suggesting that in future the systems should change so that the x, y and z figures change.

 

 

I'll revert on the other comments later.

[Gompo]

A bloke at work had his scruffy Vectra (mk1 shape) crashed into atleast 6 weeks ago, it was probably worth £500 (I reckon he paid £600 a year or so ago) maximum.

 

I dont know the ins/outs of his claim, but I know he's been in a '60' plate courtesy Insignia for over a month and is getting atleast the £600 back he paid for the car.

 

['Mail]He's Polish too so imagine he's bullshitted on his cover somewhere too.[/'Mail]

[Mr_Bo11ox]

I'll revert on the other comments later.

 

Great, hurry up

[Alpineandy]

Still haven't had a chance to find the figures but I did notice this in a spcialist newspaper;

 

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 ($334). 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%.

 

Do you really think the AA would lie about a 123% loss ratio?

[Richard]

I don't know where they are getting the average £210. Mine wasn't far off that last year and I am old, have a clean record and my postcode is in the second best group.

[Alpineandy]

Isn't that the reason why we (the taxpayers) are paying for those big buildings called "courts" and the "judges" therein who can accept testimony from "experts" and are expected to apply "reasonableness" tests?

 

A little example from Greece (sorry, I only have knowledge of car insurance in 3-4 countries, so I can't give you a big variety) on the side of claims costs is that the insurer is allowed to apply a % of depreciation on the RRP of a genuine new part, which means that the job often needs to include pattern and/or secondhand parts. It is up to the claimant (and/or their solicitors, if involved) to prove that said parts won't bring the car to the pre-accident condition. As you can imagine, this little difference in insurance practice does wonders both for premium levels (to some extent) and for avoiding write-offs of perfectly good cars for minor damage (to a MASSIVE extent).

Is this "no better" than the UK system of the inflated claims culture?

 

So you want to bring more legal/experts costs into it?

The argument any solicitor will make is that every case is different and will want this in every single case.

Also bear in mind that you have to be a barister (not a lowly solicitor) to speak in those big buildings called courts. And they don't come cheaply...

 

I'm not sure if the greek basis of law is the same as UK law (and I should ) but once again you're bringing solicitors into it and unbelieveably suggesting that this could make the claims cheaper... That wouldn't work in the UK (I find it difficult to believe it works to anyones benefit - other than the solicitor- in greece).

 

As Insurance was invented in the UK (Lloyds coffee shop - Ships captains / merchants spreading the risk in the days of regularly sinking ships) and the basis of this has been indemnity since day one, I'm not sure that it could be changed that easily. It is available (EG agreed value on classic car) but as I understand it, it would have to be a special cover to be selected by buyers and I really don't believe many would go for that option.

[Alpineandy]

Is this "no better" than the UK system of the inflated claims culture?

 

Possibly but I doubt it.

Greece isn't nearly as litigious as the UK, so it's unlikely anything that gets more solicitors involved would be better.

 

The last time I had any real involvement in Motor cover was nearly 30 years ago trying to get a cover for a local insurance company in Thailand (I was also trying to get them a personal accident cover with an average value of a life as less than £70 then!), so I'm rusty on all the different systems, but all the 'it's included in the cost of the petrol' type of insurance (where the state takes some moeny out of the petrol price and runs a central insurance fund) appear to have dissappeared due to the terrible results (and goverments inability to run anything cheaply/efficiently).

 

There may be a workable solution out there but many have looked and (AFAIK) none have found. Can you imagine what a great scoop a business journalist would get if he did find one.

This doesn't mean our system is perfect (far far from it) but I don't believe there's an easy fix without the law courts getting involved in changing the law whilst ignoring the european courts, real penalties for fraudsters and guys driving without insurance (how can you fine a guy £250 for not having insurance which would have cost £750 and expect him to take the law seriously), and a real sea change for the world wide insurance business.

 

But I'm happy to be proved wrong (honestly!), but only with some facts rather than guess work.

[Alpineandy]

My main risk has a value of €62,000,000,000

So buying an A310 is relatively risk free?

 

'Relatively' is 100% the correct phrase!

 

Actually I've sold one of them and made a decent profit for a change....

Then invested it in another car...

[Alpineandy]

I don't know where they are getting the average £210. Mine wasn't far off that last year and I am old, have a clean record and my postcode is in the second best group.

 

Looking at your picture, you got off lightly with a £210 increase!

 

 

 

 

Seriously, if you are 'more experienced' (rather than old) and claims free then I think you should shop around.

[Alpineandy]

All is not roses in the european motor insurance garden;

 

reported today;

 

GERMAN MOTOR PRICE WAR IS EASING, CLAIMS HUK COBURG

A long-running price war in the German motor insurance market is showing signs of coming to an end, according to locally based direct motor insurer HUK Coburg, which has been one of the leading forces in putting prices under pressure. However, the insurer said that prices remained below what would be needed to make the sector as a whole profitable. HUK Coburg said yesterday that it intended to continue offering the most competitive policies, but that it would raise prices. HUK Coburg, which became Germany's leading motor insurer after a long period of undercutting Allianz, swung to an underwriting loss in 2010, its first for more than a decade. The company blamed the deterioration on cold winter weather. HUK Coburg insures about 8.77m vehicles, while Allianz insures about 8.16m. Meanwhile, Allianz's new "bare bones" motor policies have been attacked by HUK Coburg board member Klaus Jürgen Heitmann. He noted that the apparently lower price of the Allianz policy – which put the policy at the tope of price comparison web sites – concealed the fact that after "optional" modules were added to put the policy on a par with standard motor policies, the cost would more than double and could even treble. HUK Coburg, which benefited from the Internet when selling direct, has been suffering from the popularity of comparison sites, which now account for nearly half of all motor insurance sales in Germany. It is particularly unhappy with Check24, where HUK Coburg is not listed, apparently because HUK Coburg does not want to pay the €75 to €100 fee demanded when a policy is sold. HUK Coburg, HDI Direkt and Talanx are backing Aspect Online as a rival to Check24.

 

But the bottom line is that they have much less claims per car than we do.

[Pete-M]

I work in a business related to all this and it's pure, unadulterated, US style greed for compensation that has put everyones insurance up.

 

This seems to be the current state of affairs.

 

Lets say that Mr A accidentally bumps into Mr B's car in traffic, no major damage but maybe a cracked indicator and scuffed bumper. A and B exchange details and go their own way.

 

Mr B unclips the bumper and goes to a garage to get a quote for repairs, garage quote £250 including doing a couple of other little bits that won't be on the receipt. Mr B rings Mr A and asks for £350 to put his car right (because he doesn't see why he shouldn't make anything out of this). Mr A can't afford £350 so says it'll have to go through the insurance.

 

Mr B then wanders down the high street and notices "Blue Light Claims"* who deal exclusively in "Not your fault" claims. Wanders in, tells them what happened (not mentioning the £350 or extra repairs) and 'Blue Light' accept his claim, and agree to get Mr B a hire car whilst the claim is ongoing. They also arrange for him to go to their 'specialist doctor' (£400) to see about that stiffness in his neck.

 

Blue Light then ring a car hire company and arrange a car for Mr B at the insurance company rate of £70ish a day + vat, + delivery and collection charges. They also ring a firm of insurance assessors to go and inspect Mr Bs car (£150ish + vat), and send Mr B's car to the bodyshop (£220 bill to the insurance for collection of Mr B's car).

 

Mr B toddles off to see the 'specialist doctor' who says that it's definately done something to Mr B's back and that he should rest for a few days, nothing strenuous. As Mr B is a painter and decorator, he has to take a couple of weeks off work. He's self employed so he speaks to his mate 'arry in the pub who agrees that Mr B was about to do a full on repaint on 'arry's house and that it's £3000 worth of work he's losing, and 'arry will stand up in court if required to.

 

Mr B then goes back to 'Blue Light' and tells them he wants loss of earnings, which they're happy to arrange for him, but it might take a while as Mr A's insurance company now wants to see Mr B's car, so Mr B should stay in the hire car for a while longer as the bodyshop can't do anything until Mr A's insurance assessor has seen the car (£150 + vat). The bodyshop are charging Mr A's insurance £30 a day + vat storage on Mr B's car.

 

Mr B will, of course, win his whiplash claim (£2000), get his car fixed (£500), get his loss of earnings for not being able to paint 'arry's house (£2000) and go back to normal without a care in the world. In fact, he'll advise anyone who has the slightest little bump to go to Blue Light Claims as they're brilliant. He won't mention that Blue Light give him a £300 dropsie if he sends people to them. Mr B doesn't give a toss about how much the insurance company end up paying out because at the end of the day "That's what insurance is for, isn't it? It's expensive enough as it is, good to get a bit back from them."

 

Mr A's insurance will go up by about 40% for a year and then eventually drop about 20% closer to where it was.

 

Blue Light will have claimed all their expenses off Mr A's insurance company, and they'll have made a few grand profit. The hire car company have made a good few quid, the body shop have made a good few quid out of storage charges etc and the work itself.

 

So, Mr A's insurance has just taken a close to £15k hit over a £250 repair. For a £400 premium.

 

The Germans have just introduced a 'minimum speed' for whiplash claims in order to stop this happening. The UK insurance companies have tried to, but they've not had any luck yet. There are close to 1500 new whiplash claims a day in the UK, of which I'd say 1400 are just there for the money.

 

 

*Blue Light Claims is a made up name for a bunch of ambulance chasing shyster compo cunts. If a company called Blue Light claims actually exists then sorry, but it's not you I'm on about. Names have been changed to protect the innocent etc.

[alf892]

Not surprising insurance is expensive but they don't help themselves.....

 

I had a small bump a couple of weeks ago where a girl went into the back of me in a queue.

 

Today I ring Adrian Flux to report. The default is you get put through to a ULR company. They are really keen to know about how you feel......neck and back especially. That is one lot of mouths to feed

 

ULR Company then put you through to Driver Assist....a credit hire company. Once they establish someone else is paying they want to give you a car.....the bigger the better it seemed. My daily is an e39 estate and they want to give me similar. Another lot of mouths to feed.

 

Now.....all I want is get get my car fixed so I tell both of the above this. They tell me I need to talk to my insurer..........ffs......this is who I rung!!

 

So I decide to talk to the third party mob......this time claim line is answered by a solicitors 'working in partnership with M&S'. So i tell them I just want my car fixed an miniumum cost to them. They can't help. Need feeding though.

 

Finally I find out who the actual insurer is so ring and give them the story......and they are delighted to take the details and will arrange repair (i know this bit should be in grin)

 

But the point is that insurers tell us it is our own fault insurance keeps rising due to fraud and claims culture and this may be partly true.............but much of the claims culture is driven by them and the companies they 'partner' to provide the 'value added services' that we don't want.

 

I think it should be legal to go a bookies and get odds on you crashing (based on your own circumstances).......you then just place the bet(=premium).......if you crash they pay up and if not they keep your dosh. Simples

[Richard]

I think it should be legal to go a bookies and get odds on you crashing (based on your own circumstances).......you then just place the bet(=premium).......if you crash they pay up and if not they keep your dosh. Simples

 

Isn't that how it works anyway?

[dollywobbler]

Pete - the people driving the blame-and-claim culture IS the insurance companies! You don't need to go looking for an ambulance chaser. Most insurance companies will encourage a Personal Injury claim. I could have done when my 2CV got thumped up the arse but a sore neck didn't strike me as anything I deserved money for.

 

They drive up the insurance costs themselves. It's disgraceful really.