Insurance - can someone please explain?
Discussion
MoelyCrio said:
Helpful.
The Competition Commission has come to the conclusion that the market for car insurance is not working well for consumers. Quelle surprise - working well for everybody in the grubby little supply chain though. They will consider what could be done to improve things and report back later in 2014.
Interestingly, one of the things they will look at is how price comparison sites are currently unable to offer different prices due to clauses imposed by the insurers. Removing some of these clauses will increase competition but will possibly make it even harder to understand the market as prices will be even more varied.
Reread it. They are frustrated at the surbrogated element of a claim. They are very happy with the competition within the industry. The aggregators are the problem on pricing not the insurers The Competition Commission has come to the conclusion that the market for car insurance is not working well for consumers. Quelle surprise - working well for everybody in the grubby little supply chain though. They will consider what could be done to improve things and report back later in 2014.
Interestingly, one of the things they will look at is how price comparison sites are currently unable to offer different prices due to clauses imposed by the insurers. Removing some of these clauses will increase competition but will possibly make it even harder to understand the market as prices will be even more varied.
I always think if a Company is trying hard to sell you something then its because they will make more money from that product, its hardly in their interest to promote something that will save you money and generate less income for them is it. Remember the sole reason Companies exist is to make a profit
Pay monthly or pay in full - absolutely no difference to the insurance company (in most cases).
Why? because :
1) If you pay in full - the insurance company gets all the money from you. You have a year's policy.
2) If you pay monthly - the insurance company gets all the money from a finance company on your behalf. You get a year's policy PLUS you have a debt to a finance company for the amount of premium plus interest.
Stopping payment would cause a problem between the finance company and you, and will affect your credit rating. The insurance company has already been paid, so your policy will still run for the full year, regardless.
Why? because :
1) If you pay in full - the insurance company gets all the money from you. You have a year's policy.
2) If you pay monthly - the insurance company gets all the money from a finance company on your behalf. You get a year's policy PLUS you have a debt to a finance company for the amount of premium plus interest.
Stopping payment would cause a problem between the finance company and you, and will affect your credit rating. The insurance company has already been paid, so your policy will still run for the full year, regardless.
calibrax said:
Stopping payment would cause a problem between the finance company and you, and will affect your credit rating. The insurance company has already been paid, so your policy will still run for the full year, regardless.
I don't think that's right. There have certainly been reports of people who have had their cover terminated mid year due to a bounced direct debit when on a monthly payment plan. I think that the way it really works is that you have signed up to a years contract. They will cover you for a year and you will pay them monthly. You have a problem if you cancel the payments at some point because you're reneging on your contract. I think some people believe that paying monthly means they are are on a kind of 'pay as you go' type of monthly rolling contract. But they are not, it's an annual contract with monthly payments.
crazy about cars said:
Yes I know but if I change to a "cheaper" car shouldn't I be refunded on the switch or does it not work that way?
I will try calling again at a different time to see what numbers I get. Say I call tomorrow I should then be expecting to pay very close to whatever I was quoted today I hope. Otherwise it's just some random numbers game.
It makes no difference to the refund whether you paid up front or monthly. The insurance company will look to see how many months cover you have had, apply their refund factor and give you that refund amount. However you pay it is skewed so that you do not get a straight refund of 50% after 6 months or 25% after 9 months, in reality you get much lower amounts than this. Do not confuse payment method with premium due.I will try calling again at a different time to see what numbers I get. Say I call tomorrow I should then be expecting to pay very close to whatever I was quoted today I hope. Otherwise it's just some random numbers game.
Edited by jkh112 on Thursday 19th December 08:26
calibrax said:
Stopping payment would cause a problem between the finance company and you, and will affect your credit rating. The insurance company has already been paid, so your policy will still run for the full year, regardless.
Incorrect. Last time I was in Afghanistan I left my insurance to run while I was away as I wanted the no claims. Half way through the tour my bank missed a payment without my knowledge and the insurer (Aviva at the time) cancelled my policy immediately. Cue lots of faffing around and me having to use my 30mins per week phone allowance, which should be for calling family, to try and get them to reinstate it which they refused to do. NCD for that year lost
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