Car Insurance - a rant.

[PaulSB]

I've just renewed my breakdown cover with AXA for £31 (was £36 last year) for at home, roadside assistance, onward travel, misfuelling, rescue & recovery, all within UK only.
This is based on the car so I'm not covered in other vehicles. I haven't had call to use them yet which is when the real test will happen but the price is a lot better than RAC or AA

I think this was one I looked at but plumped for Autoaid because it covered two people and two cars.

 

[glasgowcyclist]

I think this was one I looked at but plumped for Autoaid because it covered two people and two cars.

Just one car and one driver in our household but I might look at Autoaid at renewal time.

 

[Deleted member 26715]

I've just renewed my breakdown cover with AXA for £31 (was £36 last year) for at home, roadside assistance, onward travel, misfuelling, rescue & recovery, all within UK only.
This is based on the car so I'm not covered in other vehicles. I haven't had call to use them yet which is when the real test will happen but the price is a lot better than RAC or AA

We're straying off-topic but you would have to compare the terms to see if they are the same product, I was offered breakdown by one of the insurers but actually looking at the terms it was worth the pixels on the screen let alone the ink on the page. They would only tow you to the nearest garage for repair, as you say only on that specific car, Autoaid is any car for both wife & I

 

[glasgowcyclist]

We're straying off-topic but you would have to compare the terms to see if they are the same product, I was offered breakdown by one of the insurers but actually looking at the terms it was worth the pixels on the screen let alone the ink on the page. They would only tow you to the nearest garage for repair, as you say only on that specific car, Autoaid is any car for both wife & I

I'm happy with the terms of AXA's cover and I don't need it for any other vehicle or driver. I'll definitely try Autoaid for a quote next year though.

 

[Grant Fondo]

Most insurance companies operate a Commercially Underwritten No-claims Threshold System, hence the high premiums?

 

[IanSmithCSE]

Good evening,

I have obviously made a terrible mistake; I thought that the OP was asking a serious question and wanting a serious answer?

As programmer who has worked in the industry since the mid 1980's until the mid 2000's I thought that I could answer, I too believe that Zebedee (Boi....ing) mated with Captain Pugwash and they were both children of the Kraken.

Bye

Ian

 

[Drago]

You may have given a serious answer, or at least believe you have. Unfortunately, the facts are often self evident for what that are, and regularly undermine claims that premiums are based upon risk. How would you explain my experience as described above if they were genuinely using risk as a measure?

 

[srw]

I thought that the OP was asking a serious question and wanting a serious answer?

The clue is in the last word of the OP's title.

 

[srw]

You may have given a serious answer, or at least believe you have. Unfortunately, the facts are often self evident for what that are, and regularly undermine claims that premiums are based upon risk. How would you explain my experience as described above if they were genuinely using risk as a measure?

and had the data to prove this

No you didn't.

as I demonstrated it to be in my case.

No you didn't.

The sort of publicly available data a copper has access to has much less bearing on insurance risk than the sort of privately available data an insurance company will have.

Very specifically - an insurance company will have millions of records, from which they will be able to construct a detailed and predictive statistical multi-variate model of risk. That detailed and predictive statistical multi-variate model of risk will then be overlaid with a detailed and predictive statistical multi-variate model of customer behaviour to finesse the amount that will be charged, in order to optimise the expected profit of whichever commercial enterprise has the most control of the transaction without doing irreperable damage to their relationship to the other commercial parties to the transaction.

The net result is a premium which is closely related to risk, but also closely related to other factors. If it weren't the case that insurance premiums were closely related to risk, then adverse selection would rapidly ensure that whichever company wasn't charging a risk-related premium would rapidly either be swamped by excess claims or end up with a tiny handful of policies.

Any individual who fancies that by a bit of random searching on single reference points on databases which are proxies for, but not directly related to, the actual cost of claims to an insurance company is deluding themselves. Very specifically, theft from the owner's premises is a relatively small proportion of total risk - and police records are only a proxy for what is actually claimed for. And RTAs outside the owner's house are completely irrelevant to the actual expected claims for injury. Because drivers have an annoying habit of driving their cars on roads that aren't just outside their own home.

 

[Drago]

You can lodge a bond with the Magistrates Court and thus evade the requirement to have mandatory insurance. However, I've never actually heard of it happening in reality. I think back in the 70s it was 25 gees, and by the nineties it was 100 bags. Not sure if it's even still possible now.

 

[fossyant]

Motor insurance just arrived today - 50% more than scores of other quotes. Bye.

 

[swee'pea99]

No you didn't.

No you didn't.

The sort of publicly available data a copper has access to has much less bearing on insurance risk than the sort of privately available data an insurance company will have.

Very specifically - an insurance company will have millions of records, from which they will be able to construct a detailed and predictive statistical multi-variate model of risk. That detailed and predictive statistical multi-variate model of risk will then be overlaid with a detailed and predictive statistical multi-variate model of customer behaviour to finesse the amount that will be charged, in order to optimise the expected profit of whichever commercial enterprise has the most control of the transaction without doing irreperable damage to their relationship to the other commercial parties to the transaction.

The net result is a premium which is closely related to risk, but also closely related to other factors. If it weren't the case that insurance premiums were closely related to risk, then adverse selection would rapidly ensure that whichever company wasn't charging a risk-related premium would rapidly either be swamped by excess claims or end up with a tiny handful of policies.

Any individual who fancies that by a bit of random searching on single reference points on databases which are proxies for, but not directly related to, the actual cost of claims to an insurance company is deluding themselves. Very specifically, theft from the owner's premises is a relatively small proportion of total risk - and police records are only a proxy for what is actually claimed for. And RTAs outside the owner's house are completely irrelevant to the actual expected claims for injury. Because drivers have an annoying habit of driving their cars on roads that aren't just outside their own home.

a detailed and predictive statistical multi-variate model of risk

Ok then, so how come this 'closely related to risk' premium policy was charging Edna, over the road from us, loyal customer for 20 years, well over £1000 a year for buildings and contents, while we were paying little more than £200? (Both policies being from reputable 'household name' companies.) Was her risk six times higher than ours? I don't think so.

The industry is not built on premiums 'closely related to risk'. Risk comes into it, which is why young drivers pay more than old farts like me with their 20 years of no claims. But far more important in the business model of today's insurance industry is inertia, and people like Edna's trust for big institutions that once had some kind of integrity but have long since succumbed to an entirely cynical business model, with profit-maximising pricing policies overwhelmingly driven by one factor and one factor only: how much can we get away with?

 

[Deleted member 26715]

[QUOTE 5496770, member: 9609"]Can companies self insure ? I have heard this utter nonsense so many times from so many people that I suspect there has to be something in it.[/QUOTE]

You can lodge a bond with the Magistrates Court

I used to work for BT & they didn't have insurance as such but as @Drago states they had a bond lodged with somebody I didn't think it was Magistrates Court, Attorney General springs to mind but I might be completely wrong. At that time (left in 1992) is was common for all utilities companies to have this arrangement, whether it still is I don't know.

Edit:- Looks like it's £500,000 to the Accountant General http://www.legislation.gov.uk/ukpga/1988/52/section/144

 

[Saluki]

I fell out with the Halifax re my car insurance. I changed banks and the put my insurance up £4 a month plus a £30 admin fee. Admin for bank change and extra oeleemium for change of job.
it expires 5/03 and I will be moving companies.
I also closed current, savings and isa.

 

[glasgowcyclist]

I think back in the 70s it was 25 gees

Not even that much, it was just £15,000! (RTA 1972)
It stayed that level certainly into the '80s too and was ridiculously low even back then when I paid about £3,500 for a basic new Ford Fiesta 1.1.