Cannot get insured anymore due to a non-fault accident.
Discussion
So, to summarise, young driver wants to drive flash car rather than a boggo one.
This costs a lot of money - he can afford it year 1 but has and accident and now can't.
Insurance company don't fancy the risk any more, and so our hero is feeling hard done by.
OP - sell the S3 and buy a 1.0 Clio like the rest of us had to. When you have EARNED your no claims bonus THEN you can drive what you want. Or get a second job.
Alternatively, sell the S3 and use Uber. You'll be able to drink and you're much more likely to get laid. Girls don't give a toss about cars. They do like limos and hotels.
walm said:
To all the morons on here claiming OP is being "ripped off" and that the highly regulated industry "isn't regulated" and that it's "sharp practice", perhaps you should go and learn some market economics 101 before sounding any more like ill-educated idiots.
Car Insurance makes NO PROFIT for almost all market participants.
It is RIDICULOUSLY competitive.
If one company was massaging the data to show that a non-fault claim makes you more risky when you aren't then rest assured ALL the other companies would hoover up those customers in a matter of months.
The pathetic narrative that there is some kind of cartel behind insurance and that somehow compulsory insurance makes it anti-competitive (just like all those other compulsory things like tyres, fuel and servicing) is utterly shameful of this site, and plain ignorance.
Grow up!!!
To the OP, this is a total nightmare for you and I am very sorry to hear about it.
Sadly, life isn't fair and the other regular moronic suggestion that "insurance puts you back in the situation before the crash" simply isn't true unfortunately.
Pretty much spot on.Car Insurance makes NO PROFIT for almost all market participants.
It is RIDICULOUSLY competitive.
If one company was massaging the data to show that a non-fault claim makes you more risky when you aren't then rest assured ALL the other companies would hoover up those customers in a matter of months.
The pathetic narrative that there is some kind of cartel behind insurance and that somehow compulsory insurance makes it anti-competitive (just like all those other compulsory things like tyres, fuel and servicing) is utterly shameful of this site, and plain ignorance.
Grow up!!!
To the OP, this is a total nightmare for you and I am very sorry to hear about it.
Sadly, life isn't fair and the other regular moronic suggestion that "insurance puts you back in the situation before the crash" simply isn't true unfortunately.
TwigtheWonderkid said:
walm said:
To all the morons on here claiming OP is being "ripped off" and that the highly regulated industry "isn't regulated" and that it's "sharp practice", perhaps you should go and learn some market economics 101 before sounding any more like ill-educated idiots.
Car Insurance makes NO PROFIT for almost all market participants.
It is RIDICULOUSLY competitive.
If one company was massaging the data to show that a non-fault claim makes you more risky when you aren't then rest assured ALL the other companies would hoover up those customers in a matter of months.
The pathetic narrative that there is some kind of cartel behind insurance and that somehow compulsory insurance makes it anti-competitive (just like all those other compulsory things like tyres, fuel and servicing) is utterly shameful of this site, and plain ignorance.
Grow up!!!
To the OP, this is a total nightmare for you and I am very sorry to hear about it.
Sadly, life isn't fair and the other regular moronic suggestion that "insurance puts you back in the situation before the crash" simply isn't true unfortunately.
Pretty much spot on.Car Insurance makes NO PROFIT for almost all market participants.
It is RIDICULOUSLY competitive.
If one company was massaging the data to show that a non-fault claim makes you more risky when you aren't then rest assured ALL the other companies would hoover up those customers in a matter of months.
The pathetic narrative that there is some kind of cartel behind insurance and that somehow compulsory insurance makes it anti-competitive (just like all those other compulsory things like tyres, fuel and servicing) is utterly shameful of this site, and plain ignorance.
Grow up!!!
To the OP, this is a total nightmare for you and I am very sorry to hear about it.
Sadly, life isn't fair and the other regular moronic suggestion that "insurance puts you back in the situation before the crash" simply isn't true unfortunately.
I've only been in insurance for 4 months, but nearly every preconception I had about the industry has been blown out of the water
MitchT said:
Vaud said:
But think through the consequences of people being able to fully recover future increased premium costs. Guess what, it would drive up everyones premiums...
Not if they loaded it all onto the premiums of the people who actually cause the accidents and leave everyone else alone.People who haven't had any accident (non-fault OR fault) pay a premium that reflects the monetary risk they pose.
If an accident now means that the at fault party pays for: third party damage, own damage, third party injury AND now third party increased premiums then by definition the financial risk for EVERY DRIVER is higher.
Of course, the money from those higher premiums would be recycled to the non-fault third parties but that just makes a larger number of people (ALL drivers) pay a greater amount to a minority (non-fault third parties).
It's exactly the opposite of the government putting a cap on third party whiplash claims. Now the financial risk is lower and hence premiums drop. The reverse is true.
walm said:
1. Car Insurance makes NO PROFIT for almost all market participants.
2. Sadly, life isn't fair and the other regular moronic suggestion that "insurance puts you back in the situation before the crash" simply isn't true unfortunately.
1. Well then surely the in industry is dysfunctional then, and something should be done about it.2. Sadly, life isn't fair and the other regular moronic suggestion that "insurance puts you back in the situation before the crash" simply isn't true unfortunately.
2. Because the industry is dysfunctional?
Maybe some transparency from the industry would help?
On another note, given that we have so many ambulance chasing lawyers nowadays (who may be a driving force upon the insurance industry struggling to be fit for purpose), is there not a case for lawyers to chase for these uninsured losses?
Surely the payment of increased premiums should be a matter of the person whose driving was at fault, in that she has to pay for her own premiums and compensate her 'victim' for his increased premiums?
I realise this could open a can of worms, but I can't help but think that something is going very wrong here. I understand that car insurance is chiefly about repairing cars but things shouldn't end there. Victims of bad driving are often put to a lot of inconvenience and some loss at the very least, and as this case highlights, it shouldn't just end in getting a car repaired.
I'm going into the realms of injury here, just financial loss.
walm said:
Do you think all the insurance companies get together and say to each other...
"We know there is no change in risk for a non-fault claim but let's pretend there is and rip them off!" <evil laugh, strokes cat>
erm... yes... sort of."We know there is no change in risk for a non-fault claim but let's pretend there is and rip them off!" <evil laugh, strokes cat>
Omitting the "getting together" part.
For example...do you think the banks "got together" regarding Libor etc. or did they just realise others were doing it and followed suit?
walm said:
Or do you think they have ALL looked at the data independently and reached the same conclusion... namely if you have one non-fault claim, you tend to have more claims?
The data coming from where exactly - which was the point of my previous post. (And something which I happily accept either way).walm said:
For your preposterous "actuarial statistics are wrong" hypothesis to be right, it needs an anti-competitive cartel that would surely drive super-normal profits and higher-than-justified returns on investment.
Both of which are empirically false.
Maybe. Maybe not.Both of which are empirically false.
I can't answer that question to be honest.
But it does seem strange that in a market with no profit that there are so many competitors vying for a share of the non-existent pie. (Unless of course....the methods of making profit are, lets say, a bit dubious?)
Hope I haven't stirred your pot too much. You seem to come across as quite angry with the "morons", "grow up" and "preposterous" remarks.
I'm not here to angrily argue - just to have a friendly internet discussion.
ALT F4 said:
But is this from totally independent data or is this via vested interest funded/compiled statistics?
It is usually accepted that surveys, statistics and compiled data in the form of reports all needs to be funded, and the reason it is funded will be to demonstrate a cause/interest.
Would an independent company/body one day just suddenly fund such an activity for the fun of it?
Of course I once again stand to be corrected - I am asking these questions as I am wanting to further my knowledge on "the system".
http://www.insurancedatabases.co.uk/It is usually accepted that surveys, statistics and compiled data in the form of reports all needs to be funded, and the reason it is funded will be to demonstrate a cause/interest.
Would an independent company/body one day just suddenly fund such an activity for the fun of it?
Of course I once again stand to be corrected - I am asking these questions as I am wanting to further my knowledge on "the system".
Insurance and investing is conceptually like gambling. Odds, stake and payout. see: https://en.wikipedia.org/wiki/Expected_value
EV = (probability of no crash * premium) - (probability of crash * payout)
Unlike a pure chance game, people's and markets behavior can be predicted. They try to use past data to predict what will happen in the future. It's in all their interests to try to get the most accurate data possible. The 30odd million claims gives a nice sample size to analyse.
So by analyzing the database they try to predict: probably of accident, then what the payout will be. They know they want to try to make a certain amount of profit, so can calculate the premium. The actual method is more complex than above, and will be differ company to company.
Edited by xxChrisxx on Tuesday 12th April 13:13
heebeegeetee said:
Surely the payment of increased premiums should be a matter of the person whose driving was at fault, in that she has to pay for her own premiums and compensate her 'victim' for his increased premiums?
Where would you draw the line at what could be claimed from the tp. So I'm on the way to buy my lotto ticket and you crash into the back of me. £500 of damage, but I miss the lotto deadline thanks to your bad driving and can't buy my ticket with my usual numbers. And my numbers come up. Does your insurance company pay me £30m? If not, then in your world, why not? I would have won had it not been for your bad driving.heebeegeetee said:
1. Well then surely the in industry is dysfunctional then, and something should be done about it.
2. Because the industry is dysfunctional?
Maybe some transparency from the industry would help?
Car insurance is typically treated as a loss leader and allows insurance companies to cross sell other products at a profit.2. Because the industry is dysfunctional?
Maybe some transparency from the industry would help?
Plus they really make money on the investment side, using the premiums they hold to cover future claims to make a positive return.
The point is that the returns are about right for a highly competitive market. There is no cartel making super-high profits.
It's even more obvious when you consider that the barriers to entry are relatively low, which is another characteristic of a competitive market.
As for point 2, I mention it above but offering that sort of insurance would put premiums up significantly.
You could probably get that kind of bespoke product from a high end broker (it's essentially a big bet on having a non-fault accident), but there simply isn't the demand from the mass market hence no body offers it as standard.
If it were a cheap perk to add to differentiate your product (like protected NCB when it first came out) then it would probably be around already.
That's not to say it won't arrive in future if end-customer demand shifts.
It is literally the opposite of dysfunctional. It's a highly efficient market... hence the low profits.
heebeegeetee said:
Maybe some transparency from the industry would help?
I forgot this.What more transparency would you like?
There are several insurers who are public companies and make quarterly reports.
It's all freely available.
Just google Admiral investor relations or esure investor relations or hastings investor relations.
If car insurance was always grouped together with other insurance products in big conglomerates you might have a point but there are lots of independents now so the breakout is highly transparent.
walm said:
heebeegeetee said:
1. Well then surely the in industry is dysfunctional then, and something should be done about it.
2. Because the industry is dysfunctional?
Maybe some transparency from the industry would help?
Car insurance is typically treated as a loss leader and allows insurance companies to cross sell other products at a profit.2. Because the industry is dysfunctional?
Maybe some transparency from the industry would help?
Plus they really make money on the investment side, using the premiums they hold to cover future claims to make a positive return.
The point is that the returns are about right for a highly competitive market. There is no cartel making super-high profits.
It's even more obvious when you consider that the barriers to entry are relatively low, which is another characteristic of a competitive market.
As for point 2, I mention it above but offering that sort of insurance would put premiums up significantly.
You could probably get that kind of bespoke product from a high end broker (it's essentially a big bet on having a non-fault accident), but there simply isn't the demand from the mass market hence no body offers it as standard.
If it were a cheap perk to add to differentiate your product (like protected NCB when it first came out) then it would probably be around already.
That's not to say it won't arrive in future if end-customer demand shifts.
It is literally the opposite of dysfunctional. It's a highly efficient market... hence the low profits.
A young man in an Audi S3 is a very very bad risk, and there is NO olbigation on ANY insurer to accept it.
They will, at a price. Don't like the price? Then sell the car and get something slower.
ALT F4 said:
...good stuff...
LIBOR specifically was a cartel. At least, according to one of the main whistleblowers!Scale matters very much.
If you can gain enough customers you will be able to lower your expense ratio (overhead/customer) to the best possible level and take what meagre profit in the pool is available.
Hence the competitiveness.
Apologies for sounding angry but the tinfoil hattedness is a little depressing sometimes.
Reading recent replies above, I am getting a better idea of the market.
I do still lean towards the probability that the data/stats can be used to support a vested interest, and that non-fault claims could probably be used either way to demonstrate higher or lower future liability.
(Maybe not non-fault claims in one big bulk, but breaking it down further with other factors you could/probably demonstrate either way. But then I am not in the game of insurance markets and I'm just passing idle comments).
I do still lean towards the probability that the data/stats can be used to support a vested interest, and that non-fault claims could probably be used either way to demonstrate higher or lower future liability.
(Maybe not non-fault claims in one big bulk, but breaking it down further with other factors you could/probably demonstrate either way. But then I am not in the game of insurance markets and I'm just passing idle comments).
walm said:
It is literally the opposite of dysfunctional. It's a highly efficient market... hence the low profits.
So they do make a profit then?Your previous post said they didn't. In big capitals no less.
My partner had a no fault accident a few weeks ago (rear shunt whilst stationary). I've told her to expect her next premium to be loaded as a result. This baffles her as it wasn't her fault.
Whilst I'm happy to understand that it will happen - from the perspective of the end punter it makes no sense and sours the whole view of the industry.
Whether it's done rightly or wrongly on the back end I don't know - but more transparency would surely help this out.
Of course it's legally mandated so why bother with transparency? You could also make the argument that the lack of transparency currently says something in itself.
Insurance is not an industry I look on with fondness - most people I know are the same. It only has itself to blame.
For the OP I can feel his pain. Most of us in the real world make plans and budget for big purchases - especially if the overall cost ends up being tight to what we can afford. Coming midway through and having those budgets blown out the water randomly by a third party is a bitter pill to swallow. All those saying 'just sell up' - that doesn't help much if the car is on finance / negative equity etc etc.
Nothing to be done. Sucks to be you etc etc - but the insurance process has now created someone else who won't have any faith in the industry for the rest of their motoring days. A job well done?
eztiger said:
So they do make a profit then?
It was mentioned the car premium side of things vs the payouts can be seen as a "loss leader" with other insurance products making the profit.Which does make sense if the competitive nature of the market is such.
Take a look at supermarket fuel for example. This is priced at or even below the market value in order to attract customers to spend in store.
ALT F4 said:
It was mentioned the car premium side of things vs the payouts can be seen as a "loss leader" with other insurance products making the profit.
Which does make sense if the competitive nature of the market is such.
I was purely picking at the fact the original statement was, in bold, NO PROFIT.Which does make sense if the competitive nature of the market is such.
Then quickly reversed to some profit later on as it suited.
Profit is profit - wherever it comes from. As has been pointed out these companies wouldn't be in it for the good of their health.
eztiger said:
For the OP I can feel his pain. Most of us in the real world make plans and budget for big purchases - especially if the overall cost ends up being tight to what we can afford. Coming midway through and having those budgets blown out the water randomly by a third party is a bitter pill to swallow. All those saying 'just sell up' - that doesn't help much if the car is on finance / negative equity etc etc.
Good budgeting also involves stress testing. Being at the absolute maximum end of you budget leaving no room for a setback is a bit short sighted. Some form of accident is a distinct possibility. With comparison websites it's relatively easy to test scenarios.It's non fault, so I agree it's a bitter pill to swallow but s
t, as they say, happens.xxChrisxx said:
Good budgeting also involves stress testing. Being at the absolute maximum end of you budget leaving no room for a setback is a bit short sighted. Some form of accident is a distinct possibility. With comparison websites it's relatively easy to test scenarios.
It's non fault, so I agree it's a bitter pill to swallow but st, as they say, happens.
That's fair to a point. But most people, as I suspect you know, don't do this. Or, if they do, do it within the constraints of the risks they know exist. It's non fault, so I agree it's a bitter pill to swallow but s
t, as they say, happens.The chain of possibly having a no fault crash. Premiums possibly being loaded (by a random amount) by x number of possible insurers at some point in the tenure is starting to stretch it.
I don't know anyone budgeting for a car that even considers a *fault* claim and what it does to insurance. Plug numbers pre-purchase into a comparison site with your real info - and that's the number to work with.
Not saying it's right or wrong - but it's what happens in the real world. I'd happily wager if you took a straw poll of people in your office / friends if any of them knew what numbers their premium would spit out tomorrow if they had a no fault bump - you wouldn't get much of an answer. And most of them would probably be surprised, in a no fault circumstance, that they would likely go up. If people were more aware of the implications of a no fault claim - perhaps this would change....
The only reason I know to expect it is exposure to conversations like this on Pistonheads.
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