MPs to debate £1200 insurance cap for under 25s.
Discussion
TwigtheWonderkid said:
snuffy said:
TwigtheWonderkid said:
But I guess as a young bloke, you wouldn't want to be seen dead in a Micra. It's an old biddies car. And it's just that immature decision making that keeps your premiums high.
I used to own a Micra at the same as I owned an Esprit V8. Nothing wrong with a Micra !Plus, every other driver expects it to be driven by some old dear, whereas I used to drive it everywhere with my foot to the floor - it was more of a digital switch than an analogue accelerator.
Edited by snuffy on Thursday 23 March 17:13
PurpleTurtle said:
Hasn't this always been the case though? Whiplash issue aside for a minute, what are the stats on accidents for under 25's - increasing, decreasing or static? I would hope the trend is downward? If not, what are we doing wrong education-wise?
False whiplash claims are an unfortunate consequence of the ambulance chasing industry which has come about in the last 30 years. Everyone who pays car insurance cops for that, unfortunately. In the one serious motorway accident I was involved in (rear-ended whilst stationary by a non-braking car) I saw it about to happen in the mirror, assumed the brace position, and luckily walked away without injury. It didn't stop some ambulance chasing law firm repeatedly calling me to encourage me to pursue a false claim for whiplash until I told them to foxtrot oscar.
When I was 17 in 1989 I worked for a broker, so could spend most of my time doing quotes on cars I could afford to buy but not insure. I saw some big numbers, but nothing too silly. Back then I was running around in a £2000 VW Beetle, which cost £300/yr for me to insure TPF&T. In those days after I'd paid my tax and some rent to my mum I had about £500/month to spend how I liked - so £25 of that or 5% of my dispoable income on car insurance was bearable.
That BBC article says "MPs were recently told that the average premium for a 17 to 20-year-old driver is £3,878 a year" ... if that is true they would need to have a disposable of £76K pa to match my relative outgoing of 25yrs ago. If that average is true I can see why the yoof of today (future PH-ers) have the hump.
When I crashed my car as a new driver, which I did several times, none of my mates even thought about claiming for injury (they didn't have any), nowadays it's standard fare for them all to claim. False whiplash claims are an unfortunate consequence of the ambulance chasing industry which has come about in the last 30 years. Everyone who pays car insurance cops for that, unfortunately. In the one serious motorway accident I was involved in (rear-ended whilst stationary by a non-braking car) I saw it about to happen in the mirror, assumed the brace position, and luckily walked away without injury. It didn't stop some ambulance chasing law firm repeatedly calling me to encourage me to pursue a false claim for whiplash until I told them to foxtrot oscar.
When I was 17 in 1989 I worked for a broker, so could spend most of my time doing quotes on cars I could afford to buy but not insure. I saw some big numbers, but nothing too silly. Back then I was running around in a £2000 VW Beetle, which cost £300/yr for me to insure TPF&T. In those days after I'd paid my tax and some rent to my mum I had about £500/month to spend how I liked - so £25 of that or 5% of my dispoable income on car insurance was bearable.
That BBC article says "MPs were recently told that the average premium for a 17 to 20-year-old driver is £3,878 a year" ... if that is true they would need to have a disposable of £76K pa to match my relative outgoing of 25yrs ago. If that average is true I can see why the yoof of today (future PH-ers) have the hump.
A simple rear end accident could cost a fortune if a teenager with four mates in his car crashes into a young family. There are 7 whiplash claims and a hire car and damage to pay for. Those sort of claims just used to have the damage repaired, there were no adverts on TV encouraging claims, no cold calling, no texts, no internet to push it, no no win, no fee solicitors and so on.
I'm not saying only young kids crash, but they are renowned for it and I was a typical young driver when I passed my test, as were many on here ifntheyre honest. I drove way too fast, had little awareness of what was going on around me and left no margin for error in my driving. As I've aged, I've gained experience and slowed down a bit.
crankedup said:
ikarl said:
Under 25's should just drive uninsured then as the penalty for being caught is 'only' £300 and, being realistic, what's the chance of being caught?
Think there are currently 1m+ drivers that are uninsured
Chances of being caught are now high, those darned cameras spot reg plates and link to insurance and tax. Not up to date expect. fine in t322439681639322439681639Think there are currently 1m+ drivers that are uninsured
SpeckledJim said:
vsonix said:
s3fella said:
£1200 is not a lot of money
err.... It's close to a month's take home wages if you work minimum wage - which if you're under 25 is quite likely. If you reckon it's too high, you should establish the insurance company that will shoulder those risks for less. You'll win all the business and make a fortune.
I don't think this is the answer but it is something that needs to be looked at. If there is a law that requires motorists to have insurance, there should be regulation that prevents them from being gouged by that requirement. Insurance companies are in business to make money and they should be allowed to do so, but the current situation is becoming punitive.
The higher premium for cheaper cars is creating a growing number of people who can afford a car, or insurance, but not both. Wasn't there a thread on here a while ago that said the government was looking at reducing the number of whiplash claims, and the insurers said that would cause them to put premiums up?!
Just what exactly would cause premiums to drop besides regulation? They seem to be calculated partially from risk, and partially from what the insurers want to earn this year.
A lot of young people who would have been messing about with cars a few years ago, now spend that money in an X box, big telly and the latest games. If we want there to still be motoring enthusiasts in the future, they still need to be able to afford that first banger.
The higher premium for cheaper cars is creating a growing number of people who can afford a car, or insurance, but not both. Wasn't there a thread on here a while ago that said the government was looking at reducing the number of whiplash claims, and the insurers said that would cause them to put premiums up?!
Just what exactly would cause premiums to drop besides regulation? They seem to be calculated partially from risk, and partially from what the insurers want to earn this year.
A lot of young people who would have been messing about with cars a few years ago, now spend that money in an X box, big telly and the latest games. If we want there to still be motoring enthusiasts in the future, they still need to be able to afford that first banger.
D-Angle said:
I don't think this is the answer but it is something that needs to be looked at. If there is a law that requires motorists to have insurance, there should be regulation that prevents them from being gouged by that requirement. Insurance companies are in business to make money and they should be allowed to do so, but the current situation is becoming punitive.
The higher premium for cheaper cars is creating a growing number of people who can afford a car, or insurance, but not both. Wasn't there a thread on here a while ago that said the government was looking at reducing the number of whiplash claims, and the insurers said that would cause them to put premiums up?!
Just what exactly would cause premiums to drop besides regulation? They seem to be calculated partially from risk, and partially from what the insurers want to earn this year.
A lot of young people who would have been messing about with cars a few years ago, now spend that money in an X box, big telly and the latest games. If we want there to still be motoring enthusiasts in the future, they still need to be able to afford that first banger.
They're not being gouged though, as a few have said, insurance is simple; the premiums of the many pay for the claims of the few. If the few become many, as they are for younger drivers then everyone has to pay for. It's only fair that the individuals who are co soldered high risk pay more. The higher premium for cheaper cars is creating a growing number of people who can afford a car, or insurance, but not both. Wasn't there a thread on here a while ago that said the government was looking at reducing the number of whiplash claims, and the insurers said that would cause them to put premiums up?!
Just what exactly would cause premiums to drop besides regulation? They seem to be calculated partially from risk, and partially from what the insurers want to earn this year.
A lot of young people who would have been messing about with cars a few years ago, now spend that money in an X box, big telly and the latest games. If we want there to still be motoring enthusiasts in the future, they still need to be able to afford that first banger.
Insurance is not about you, or your car, it's primarily about the people that you can injure / kill and the property you can damage.
The government has proposed some major changes to whiplash claims, but the reduction in premium that could come from that has been offset by them changing the rules on higher value claims and the increase in that calculation has offset the savings and then some.
D-Angle said:
I don't think this is the answer but it is something that needs to be looked at. If there is a law that requires motorists to have insurance, there should be regulation that prevents them from being gouged by that requirement. Insurance companies are in business to make money and they should be allowed to do so, but the current situation is becoming punitive.
The higher premium for cheaper cars is creating a growing number of people who can afford a car, or insurance, but not both. Wasn't there a thread on here a while ago that said the government was looking at reducing the number of whiplash claims, and the insurers said that would cause them to put premiums up?!
Just what exactly would cause premiums to drop besides regulation? They seem to be calculated partially from risk, and partially from what the insurers want to earn this year.
A lot of young people who would have been messing about with cars a few years ago, now spend that money in an X box, big telly and the latest games. If we want there to still be motoring enthusiasts in the future, they still need to be able to afford that first banger.
Who is being gouged? I wouldn't insure an 18 year old me to drive anything for 1200 quid, would you? That's a scratch and a new wing mirror for the car you clip... Besides car insurance is brutal the profit margins are pathetic.The higher premium for cheaper cars is creating a growing number of people who can afford a car, or insurance, but not both. Wasn't there a thread on here a while ago that said the government was looking at reducing the number of whiplash claims, and the insurers said that would cause them to put premiums up?!
Just what exactly would cause premiums to drop besides regulation? They seem to be calculated partially from risk, and partially from what the insurers want to earn this year.
A lot of young people who would have been messing about with cars a few years ago, now spend that money in an X box, big telly and the latest games. If we want there to still be motoring enthusiasts in the future, they still need to be able to afford that first banger.
D-Angle said:
I don't think this is the answer but it is something that needs to be looked at. If there is a law that requires motorists to have insurance, there should be regulation that prevents them from being gouged by that requirement. Insurance companies are in business to make money and they should be allowed to do so, but the current situation is becoming punitive.
Paying a premium that relates to the risk they represent is not being 'gouged'.D-Angle said:
The higher premium for cheaper cars is creating a growing number of people who can afford a car, or insurance, but not both. Wasn't there a thread on here a while ago that said the government was looking at reducing the number of whiplash claims, and the insurers said that would cause them to put premiums up?!
No, exactly the opposite. It was expected to reduce premiums, but there have been other factors which have moved premiums the other way.D-Angle said:
Just what exactly would cause premiums to drop besides regulation? They seem to be calculated partially from risk, and partially from what the insurers want to earn this year.
They are calculated based on risk, the insurer's desired profit margin and capital costs and, most importantly, taking into the competitive state of the market which means that profit margins are miniscule. D-Angle said:
A lot of young people who would have been messing about with cars a few years ago, now spend that money in an X box, big telly and the latest games. If we want there to still be motoring enthusiasts in the future, they still need to be able to afford that first banger.
That's their choice!!sidicks said:
...profit margins are miniscule...
Non existent.https://www.google.com/search?q=google&ie=utf-...
"In 2013, UK insurers are forecast to pay as much as £1.08 in claims and expenses for every pound they earn from premiums – the 19th consecutive year that the industry will have failed to turn an underwriting profit."
After the whiplash reforms they turned a profit in 2015 but they were back into a loss in 2016 and looking like another loss this year...
SKP555 said:
menguin said:
14 years ago it cost me £1200 to insure my first car - a 1.3l Polo from 1989. People can either afford to drive or not - imposing an artificial and arbitrary cap on a market that should be defined by risk and cost is stupid especially when if anything insurance costs adjusted for inflation may have even gone down!
That would be fine but since insurance is mandatory it's not a free market anyway. And since it's highly desirable for everyone that young drivers have insurance it makes sense that we should look at ways of making it more affordable. Insurance companies compete on price. From what I understand of the industry the margins aren't huge. If there was a gap in the market because of significant overcharging someone would jump in - like Sheila's wheels for females.
Ways to make it more affordable = buy your kid a £1000 or less snotter. It's what I drove. Nowadays I see more new drivers driving £5k cars. Of course this will cost more to insure.
Moonhawk said:
menguin said:
14 years ago it cost me £1200 to insure my first car - a 1.3l Polo from 1989. People can either afford to drive or not - imposing an artificial and arbitrary cap on a market that should be defined by risk and cost is stupid especially when if anything insurance costs adjusted for inflation may have even gone down!
I do wonder whether expectation has a lot to do with it. Are kids today driving newer, more expensive, more powerful and more desirable cars and at a younger age than our generation? When my step daughter passed her test aged 18 - she was handed the keys to a 3-4 year old Fiesta (though she really wanted a more desirable Renault Clio like her mates had)I couldn't afford to buy a car for 3 years after I passed my test I was 21 before I had a job that paid enough - even then I had to settle for a relatively battered 10 year old 1.1l Fiesta and it still cost over £1300 to insure in today's money. Had I bought a newer more desirable car - I bet my premiums would have been much higher.
I have to question whether like for like premiums actually increased for young people?
I just did a quick experiment on a price comparison site. I entered my details as if I were 21 again and living at the address I had when I bought my first car, same occupation, parking on the drive etc. I found a car on auto trader that would in todays terms, be broadly equivalent to the one I had (if a little better) i.e. a 10 year old 3 door 1.2l Fiesta worth around £1300.
The two lowest insurance premiums for TPFT came in at £1062 (which is £635 in 1997 money) and £1326 (which is about the same as I payed in 1997).
Edited by Moonhawk on Thursday 23 March 09:21
fblm said:
sidicks said:
...profit margins are miniscule...
Non existent.https://www.google.com/search?q=google&ie=utf-...
"In 2013, UK insurers are forecast to pay as much as £1.08 in claims and expenses for every pound they earn from premiums – the 19th consecutive year that the industry will have failed to turn an underwriting profit."
After the whiplash reforms they turned a profit in 2015 but they were back into a loss in 2016 and looking like another loss this year...
sidicks said:
fblm said:
sidicks said:
...profit margins are miniscule...
Non existent.https://www.google.com/search?q=google&ie=utf-...
"In 2013, UK insurers are forecast to pay as much as £1.08 in claims and expenses for every pound they earn from premiums – the 19th consecutive year that the industry will have failed to turn an underwriting profit."
After the whiplash reforms they turned a profit in 2015 but they were back into a loss in 2016 and looking like another loss this year...
fblm said:
Of course but if they make a profit, or loss, on the float it doesn't retrospectively mean the insurance was miss-priced when the premium was collected. As I appreciate you know. Ironically its the profit they make on the float that has been subsidising the premiums for 20 years!
Yes but investment return is part of writing the business, so the business is profitable, just not very!sidicks said:
fblm said:
Of course but if they make a profit, or loss, on the float it doesn't retrospectively mean the insurance was miss-priced when the premium was collected. As I appreciate you know. Ironically its the profit they make on the float that has been subsidising the premiums for 20 years!
Yes but investment return is part of writing the business, so the business is profitable, just not very!Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff