Is Insurance becoming irrelevant?

[Joker 1299]

Its clearly more cover for less premium. The same driver hits a wall, and the car needs to be replaced...

Did you see my earlier post? Same cover, same insurer, same driver (rider - me). Half price!

 

[66tim99]

Yes it is more cover for less premium but the risk is less if the driver is better even if you give them comp cover.

What tells you the driver is better? That they asked for comp cover?
(Im not being punchy, just genuinely interested in what the how insurance companies assess risk)

 

[vwsween]

Its more likely to be as I said before. They try to identify which is likely to be a poorer risk and a young driver wanting third party is shown by claims statistics to, on average, be a higher risk.
But every insurer has their own methods and theories.

 

[66tim99]

Did you see my earlier post? Same cover, same insurer, same driver (rider - me). Half price!

I hadn’t but just read it now - madness isn’t it? Like being charged more for a flight because you’re using a Mac? (Which might be an urban myth)

 

[66tim99]

Its more likely to be as I said before. They try to identify which is likely to be a poorer risk and a young driver wanting third party is shown by claims statistics to, on average, be a higher risk.
But every insurer has their own methods and theories.

My question would be then - if I rang for a third party quote, am I tarred with the ‘risky driver’ brush?

 

[Velma's Dad]

Yes always be careful of the "signals" you are giving out. The big one being never to ask your insurer about a possible claim for a small ding, and then go on and get it fixed yourself... they'll end up logging the "incident" anyway as a risk indicator when you come to renew. (Unless of course, your T&Cs do require you notify any such "incidents" and I'm not advising anyone not to comply with those ).

 

[vwsween]

My question would be then - if I rang for a third party quote, am I tarred with the ‘risky driver’ brush?

Quite possibly with some insurers if you were 19 and driving a car that they would normally expect to be insured fully comp. I am simply trying to get you to appreciate that its possible for an insurer to quote more for TP than comp if their stats indicate that TP young driver business gives them poor results so they encourage you to go elsewhere.

 

[Velma's Dad]

Quite possibly with some insurers if you were 19 and driving a car that they would normally expect to be insured fully comp. I am simply trying to get you to appreciate that its possible for an insurer to quote more for TP than comp if their stats indicate that TP young driver business gives them poor results so they encourage you to go elsewhere.

Unfortunately I think that illustrates the information asymmetry that exists, what I mean is that the insurance company is entitled to all the information they wish about the prospective policyholder, but they are opaque about how they will use that information. That might be justifiable in an "discretionary" market but we are all obliged statutorily to have third party cover.

 

[GrannyJen]

Yes always be careful of the "signals" you are giving out. The big one being never to ask your insurer about a possible claim for a small ding, and then go on and get it fixed yourself... they'll end up logging the "incident" anyway as a risk indicator when you come to renew. (Unless of course, your T&Cs do require you notify any such "incidents" and I'm not advising anyone not to comply with those ).

Oh I ALWAYS notify my insurance company ...

although they said damage by supermarket trolleys were exempt .....

honest.... true ........

 

[vwsween]

Unfortunately I think that illustrates the information asymmetry that exists, what I mean is that the insurance company is entitled to all the information they wish about the prospective policyholder, but they are opaque about how they will use that information. That might be justifiable in an "discretionary" market but we are all obliged statutorily to have third party cover.

and the suppliers of that product are free to chose how they each price it, package it, sell it and can chose to refuse cover if they wish, just like most other things whether they are compulsory or not. Fortunately there are many players in the market which is a competitive one. If there was no attempt at underwriting with just standard questions there would be no competition.

 

[soulstyledevon]

I'm sure the people who work in the insurance sector won't mind me saying the industry has its dirty little secrets that ultimately work against all policyholders by pushing average premiums up.

One such is the "contract hire" racket (I use the term deliberately, because it is). When you have a no fault accident - in my case because someone ran into the back of me when I was stopped at lights - the next thing you know is your insurer has referred you on to a "claims management company". Who having "assessed your needs" then "suggest" you need a rental vehicle while yours is being repaired, the costs of which will be met by the third party because you weren't at fault.

If you accept that, great, you'll have a nice shiny "equivalent spec" vehicle to use while yours is being repaired. But look at the per-day rate they're going to levy - in my case about £2,000 per day. After seeing the paperwork I declined it, even though I wouldn't be the one paying it, and suggested they come and uplift the car which I hadn't used. They got very ugly about it.

Of course, my insurer will have trousered a very nice "referral fee" from the contract hire company. So, my insurer actually profits from my accident, while an inflated bunch of costs is incurred by the other insurer. And who actually ends up paying for all that in the end?

My wife was driven into at the train station. The other party admitted fault.
We were given a brand new Mercedes SLC AMG to use for 9 weeks whilst ours was in for repair. Followed by an M4 for 4 weeks
Dread to think of the cost...

Unfortunately my wife is still suffering from whiplash from this low speed collision. We’ve paid out thousands in private physio and medical bills and the case is still on-going. We’ve had a small in-trim payout, but the hoops and jumps we’ve had to go through to get this.
We have been offered a settlement, but turned it down as my wide still has on going medical costs.

Annoyingly, this still affects are current renewals on the California as until the case is settled my wife (although not at fault) is classed as at fault...

Don’t get me started about being able to protect NCB and windscreen replacement which doesn’t affect NCB. However after two replacement screens in two years, a third would have one insure company refuse to insure me...