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What the F is going on with insurance companies these days?!!

2K views 38 replies 19 participants last post by  AlexT 
#1 ·
I sold my GT Blackline last Xmas and bought a 'lovely' 1.3 75 bhp grande punto £30 to tax jobby.

I swapped the cars on my existing policy and only got a new insurance policy in August this year.

I was quoted £395 by Aviva who were the cheapest at the time (very unusual for Aviva to be the cheapest in my experience - usually the dearest).

I also got a quote on a 159 2.4 ti just out of interest as I knew that I wouldn't be able to handle the sheer power and quality of the Munto. This came in at around £630 which I thought was very good for a 26 year old chap on a 210bhp Alfa beast!

I have since just this minute checked what they would quote me on the 159 2.4 ti and it was coming in at £1300?! :wow:

I just re quoted the Munto which I am currently insured on with Aviva for £395 and that came in at a cool £1000!!!!! :wow::wow::wow:

They must have cottoned on to how similar these 75bhp diesel Muntos' are to Bugatti Veyrons'?!

I've also ran a quote for the Munto with GoCompare and the best price was Privalege at £596. How is this possible? Do they literally make up what they want to charge or what??

Makes you wonder why (apart from the obvious) you should bother paying for insurance.
 
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#5 ·
I was told to do that even if they will never drive it as it will always bring it down in price.... cant rememeber the reason but i was told this by a mate who works in the industry....
 
#6 ·
I agree. I always do this when getting new policies too. I just think it's madness how quotes go up and down with the time of the month, year, weather etc. Really strange that I've saved my self £600 on my insurance by getting insursed at the end of July. Perhaps this is a good time of the year to be shopping for car insurance?
 
#9 ·
Someone has to do something about car insurance. It's beyond ridiculous. The whole concept of "No Claims Bonus" no longer makes any sense. How can it only apply to one car when I own two and haven't claimed for either? Why isn't it valid or built up on classic policies? What is the point if you're going to up the premium anyway?

Insurance companies automatically renewing your policy "for your convenience" and then jacking up the price to as much at 200% also strikes me as a massive con. If I ring up and complain, all of a sudden it's back down to a more acceptable price.

I was tempted to start one of the ePetitions on the government website but never got round to it.

Ian A.
 
#11 ·
yes, as further evidence of this, I tried to get an estimate for my girlfriend's car (a 2001 hyundai coupe) on my name and my car on her name: they came out as exactly the same price. Doesn't matter what you drive, you can't go below a certain threshold according to the area where you live.
 
#10 ·
talking of which, I just got shafted by mine..

they sent me a renewal letter with a 20 quid a month increase, to which I should have immediately said "****** you miss daisy!" and cancelled, but then I said I also had to change address, so that went further up to a whopping 121 quid a month! (mind you, I'm 31 with 13 years no claim bonus and a clean license!). I called them too late apparently (they don't bother to call you and ask you if you're ok with your premium being doubled, they just go for it), and they automatically renewed my insurance at the new price! I called them and they agreed to come down to 82 a month for 10 months and they'll pay the last one. I made them note that I got confirmation from other insurances that I could get 59 quid a month, but they said "sorry, we're just providers, we refer to other insurance companies".

Turns out that:
a) most insurance companies don't take into account more than 9 years no claim bonus

b) they mainly charge you according to where you live, and even if someone in your neighbourhood has an accident and claims for it, it will affect the rating of the area, even if the accident happened somewhere else.

c) Apparently stuff like drivers' license counts as well: I have a full EU license, and while some insurances won't even bother to insure me with it, others will do, but a more expensive price.

My action plan now is to probably have my license converted (50 quid), then go for the cancellation fee costs (which again, are insane!) and do a multicar with Admiral probably.

Another annoying thing (at least for me) is that most of the insurance phone lines are crap and you can't really understand what they say (many are based in Glasgow, and no offence to my Scottish friends, I love you guys, but if you work on a phone centre please do sort your accent out!), they put pressure on you buy saying "you gotta decide now really"..

I really really think we could start a petition, and if you do it, I'm in.
 
#38 ·
My action plan now is to probably have my license converted (50 quid), then go for the cancellation fee costs (which again, are insane!) and do a multicar with Admiral probably.
If you do that, will you then have to declare you have only had your license for 1 week rather than the reality of you having a Euro license for x many years. Wouldn't surprise me if they got you there too! :mad:
 
#12 ·
Don't just rely on price comparison sites, get quotes from insurers like Direct Line who are not on those sites. Worked for me, the lowest quote on the comparison sites I got was £350 for my 95hp Mito, I eventually insured it for £275 with an insurer not quoted on the comparison sites ;) My former insurers offered to automatically renew my policy.... it would have cost me £200 extra if I had let that happen :eek: Loyalty is not rewarded and you can't trust any of them.
 
#13 ·
I just can't understand why I'm being quoted like a 17 yr old again when I'm actually 26 going on 27 and have a clean license and 5 years no claims 'bonus'. My Mrs is a nurse too!! So adding her isn't all that great either any more.

We tried the Admiral multy car and it was a right load of cack.

I think something needs to be done about this as it's completely ridiculous price fixing.

I feel a petition coming on. Is it worth writing to the insurance underwriting authority or what ever they are? Like the insurance equivalent of the FSA or an ombudsman or something?

This is seriously going to ruin my chances of getting back into an Alfa!!!!!!!
 
#14 ·
It isn't price fixing, it is price reality.

Insurers already work under very fine margins, and many of them run at a marginal profit or a loss. Insurance isn't perfect in how they calculate costs - age, location, claim history, car type etc - but is one of the more precise insurance sectors.

What's finally happening is that the increase in claims / damage from uninsured drivers and all the false whiplash claims are coming home to roost.
 
#15 ·
I'm sorry man, but I totally disagree.

There is an ever-growing amount of speculators in this field, companies that use other insurance companies and re-sell insurances with their commissions on it (mine, The Green Insurance, actually goes through other insurances and finds the best deals, the actual one is with Allianz, whose online quote is actually half of what I'd be charged by mine!). The truth is that there's a serious de-regulation, which is deliberate because it gives a lot of work to a lot of people (and money too). It still remains that it's one of the biggest legalised scams ever, and I'm surprised that consumers' associations aren't acting against it, what we have in front of us is the ABC of lobbying.
 
#19 ·
I'm not convinced this accounts for my automatic renewal going from £270 to £450 and then getting a new quote online WITH THE SAME COMPANY and THE SAME DETAILS for £270! That's not fine margins, that's profiteering!

It costs me more to insure a Smart ForTwo with 69bhp and full no-claims bonus than it costs to insure a modified TVR Griffith with 350bhp and 0 no claims bonus (classic policy). If that doesn't demonstrate there's something seriously wrong with UK car insurance, I don't know what does! :rant:

Ian A.
 
#16 ·
Someone banged into me 17 days ago, not a problem as insurance have provided me with a nice new golf hire car to drive around, but since the accident they've done nothing, will prob be at least another couple of weeks until car is fixed, totally inefficient and its this kind of thing that puts all our premiums up
 
#20 ·
I love these threads! My aristo cost roughly £2500 last year with swinton. Comes up to renewal and they now want £4800!!! Nothing has changed, not made a claim. Swinton also helped themselves to a small print automatic renewal and took the money out of my account before I even knew what the renewal price was! I shopped around and its now £1172!

Insurance is pure profit as far as I'm concerned. All you have to do is look at their figure sheet and the fact the CEO is swimming in £50 notes! When was the last time you heard an insurance company go bust?
 
#22 ·
I think this year (May 2011) was the only time the re-quote was the best quote.
I'm 40 now :)cry:) and the GT quote was for £435 for myself and the wife, 15K a year, parked on the drive, social, commuting and for work.
All the comparison sites and individual quotes were coming up well over this figure. So I phone Esure back and they dropped £20 off it as a renewal.
I dread to think what an actual sports car with some power would cost me to insure! I supposedly live in a good post code as well.
Seems like money for old rope to me, but then insurance companies swear that car insurance makes no money. Sure.
 
#23 ·
You know, I thought the same: I've been tinkering with the idea of getting me a '68 Ford Mustang, but was quite worried about insurance costs.. turns out it'd cost me 289 a year, plus no road tax.. if you do some maths with the consumption costs, one kinda wonders whether it's worth to invest 15k in a classic car and run it around for less than a modern car costs!
 
#25 ·
My renewal from Tesco's came in at £150 more than last Year, and as I have 10 Years NCB with Tesco, no claims, no alterations to the Car, no endorsements, no convictions, and NO changes in any way or form, so I was amazed they could increase my premium, by THAT amount with NO justification at all, I felt hard done by.........:eek:

So, obviously I decided to shop around, and was totally AMAZED at some of the quotes I was given, some over a £1000, and some companies would NOT even insure me........ :wow:

Anyway, to cut a long story short, my Tesco's quote was the best I could find anywhere, and I reluctantly had to accept it, with my tail between my legs, which really ****ed me off in one way. So I think Insurance nowdays is a totally Lottery all round, which is ridiculous !!!!......:rant:
 
#26 ·
I would have some sympathy with insurance companies who are having to cope with the cost of uninsured drivers and the cost of personal injury claims, many of which are invented. But insurance comapnies have no consistency. After being insured with Aviva for several years and with no changes to my circumstances at renenwal time I get a cheaper quote from the RAC. Guess who the RAC insurance is actually with? Yes with Aviva; and this is despite having to cover RAC's margin. I don't subscribe to the argument that it is all about careful analysis of statistics. It is much more likely that they charge what they think they can get away with. The wild fluctuation of premiums shows that there is something fundamentally wrong with the insurance market. So I do believe that there should be a proper investigation by the Office of Fair Trading or whoever is the appropriate body.
 
#30 ·
Apologies for that - I was a little hung over this morning and needed to unload!

Insurance is incredibly misunderstood, and on top of that the insurance companies do themselves absolutely no favours at all. It is however far from the licence to print money that many think it is, and in terms of return on capital invested and premiums paid, is a real dog of a business.

People often forget that insurance is a long term game. Losses can be huge in any one year, and profits equally the same the next. Firms build up capital over the years along with their customer base, and can manage the peaks and troughs. Long term though, the margin is tiny.
 
#33 · (Edited)
let me ask you something man, do you by any chance work for (or own) an insurance company? ;)

I'm a bit of a simpleton probably, but here's the way I think an insurance should work:

1)You're new, you come from another insurer with specific credentials, we evaluate them and give you an estimate (with no gimmicks possibly, honest upfront prices)
2)you drive your car, you behave well, don't cause any damage to you or others, we're all winning, we lower your premium every year and give you a no claim bonus to keep a record of your conduct.
3)you smash things, claim all the time, get in trouble: sorry man, we increase your premium, you're a bad, bad driver and you need to be held responsible for it.

It's no rocket science, is it? Excuses like "we need to compensate for all the bad drivers" (which are a minority anyway), and "all insurances are raising their prices" are answers that are a bad, bad sign. Maybe insurance companies should have capped numbers of customers, so that they don't lose control, or maybe they should give more transparency on how they calculate premiums. This whole idea of having to rummage through the internet or agencies to find the best deal is nonsense, just like the fact that they turned the address/area thing as a major reason of price change.. It's not a big scam, it's a HUGE one.

If I'm a law abiding, well mannered driver, why should I pay for those who aren't? They should raise the prices of the offenders and of them only, and I don't care if they can't afford to pay for it, let's not forget that driving a car is not a right, but a responsibility.

Truth is that insurance companies will hardly say no to you (unless you're Rowan Atkinson), they think about profits, not ethics..
 
#31 ·
I'm in a good mood with my insurance, for my first year with 1.6 145 then 2.0 145 it was £249 a month then had an accident that wasn't my fault and the renewal is £91 a month.
 
#37 ·
I don’t work for or own an insurance company. I have worked for LV and Aviva in the past, although not in any way relating to insurance.

I have a reasonable understanding of the market. One of my parents and my other half both for (different) Lloyds reinsurers.

People tend to look at themselves when looking at insurance. That is of course what counts to them but to understand how you are affected you have to understand the whole market.

If we take reinsurance out of the equation, as that adds a layer of complication that isn’t immediately relevant, the insurance industry really is remarkably simple like many aspects of financial services – it is a balancing act.

The balance is to bring in more premiums from customers than they have to pay out in claims. And to back up the big claims they might have, they keep a nice healthy chunk of capital in reserve. This is often invested to make more money. In the UK and other countries, the industry regulator prescribes the minimum amount of capital they need to keep in reserve according to the sort of business they insure.

The output of this balancing act is generally called the combined ratio. If it is under 100% that means generally that they’re collecting more cash than they’re paying out. A ratio of over 100% means they’re paying our more, and likely to be making a loss.

Pretty simple so far. Now the next step is to consider the risk – what are the risks and associated costs with the things that have been insured.

I can understand the comments about transparency, but the insurance industry is anything but. Being transparent would be giving away the keys to the safe. Hidden away in each insurance company are years and years of experience and data upon which their underwriters set the levels of risk and prices attached to insure it. Over the years, as technology advances and more elements can be measured, more and more elements feed into what sort of price you pay. So that’s why today we now have things such as postcode affecting your premium. Previous claim and underwriting history will have shown them that things such as where you live, how many miles you do on average, what your job is, what car you drive, how old you are etc etc all affect the level of risk that they’re insuring. And that’s just you. Then there are all the costs associated with the risks they’ve insured. They have no idea if you’re going to crash into a £100,000 Merc or a Citroen 2CV. They’ve no idea if you’re going to be hit by an uninsured driver and need medical and legal cover paying out. The bad driver that paid his premiums for the year and resulted in tens of thousands of pounds of claims – yes, he’ll pay more but yes, you will too. If the books don’t balance, insurance doesn’t work (unless you start looking at reinsurance, but I promised we wouldn’t bother here today ;) ). If you don’t pay for this, exactly who is going to? Please don’t suggest the government, because we all fund that anyway. Well, some do (same argument here – why should I pay for the benefit claimants?!).

Capping the numbers simply doesn’t help with this problem, and indeed would prevent some companies from bothering with the market. If they don’t believe they can win more of it and be profitable, they won’t bother.

If, as some suggest, people are that bad at driving and have a claims history as long as their arm, then they’ll certainly pay for it. Or, they simply won’t be insurable and will not be able to drive.

Insurance companies rarely do say know – they don’t want to be known for not offering cover – but there is often areas of business that they simply don’t want, and this is where the commercial aspect of their business really comes in.

Having set their risk and priced it at what they believe is correct, they now make commercial decisions about what sort of business will be best for them and will price accordingly to attract it. They’ll also price differently if their focus is on maintaining and retaining parts of their existing business, or instead focussing on acquiring new business. Car insurers also tend to insure lots of other things too, and so there are opportunities for cross-selling.

So that’s why some companies who specialise get a ‘name’ for being good for some sectors. Adrian Flux are known for specialising in modified cars – perhaps taking on riskier business but they’ve history in that sector of the market and believe they can price risk more accurately (and lower) than others. Aviva and LV are known for wanting safer drivers and compete on price, and so have to shift higher volumes to make the same money on lower margins. So yes, Aviva probably will insure the 18 year old who’s just climbed into his Citroen Saxo, but they’re probably not really interested in the business and will price themselves almost out of the market. If someone still buys then great.

Finally, I don’t think it is really necessary to talk about distribution but a couple of comments probably warrant it. This is absolutely NOT a scam, and I’m really surprised that anyone thinks it is. We’re talking about a product that has a huge number of variables that can affect the price, and a market in which there are dozens of insurers competing. Without brokers or online quote aggregators it would simply be impossible (or just hugely time consuming) to make any sorts of decent comparisons between different firms. It would also be impossible for smaller insurers and new entrants to the market to compete. Any new entrant would need to invest a huge amount of money into technology and distribution of their own product if they weren’t there, along with all of the advertising. If I go to Gocompare or any of the others, I see search results for companies I’ve never heard of. And I would never have heard of them without tools such as these. Yes, there is an overhead and commissions but my personal choice is that I choose to pay that in return for the service. Nobody built their website and data integration with 100 insurance companies for free.

So it still isn’t rocket science but there is a bit more to it. As I’ve said a couple of times, it is still far from perfect and to be honest, most insurance companies do themselves no favours at all – selling details to claims management companies, some deliberating refusing genuine claims etc – but equally suggestions that it is unfair or a scam are a long way from the truth. The long term trend of the costs of the risks they’re insuring has been rising for some time. Competition kept the prices artificially low for probably too long and right now we’re seeing a rapid adjustment to return the balance.

Right – I’m off to have a beer. I won’t be driving and adding to the risk afterwards J
 
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