Insurance rant

[TwigtheWonderkid]

Do you accept that in my example rather extreme example of the twins, twin A is a higher risk of having his car hit by an unknown tp going forward than twin B.
If you do, then do you accept that within a group of non fault accident victims, there will be a proportion that have circumstances that make them a higher risk, like twin A.
Therefore, that group as a whole are going to incur more claims because of that proportion.

If you don't accept twin A is a higher risk than twin B, then there's nowhere for us to go with the discussion.

[xRIEx]

TwigtheWonderkid said:

Do you accept that in my example rather extreme example of the twins, twin A is a higher risk of having his car hit by an unknown tp going forward than twin B.

Yes.

TwigtheWonderkid said:

If you do, then do you accept that within a group of non fault accident victims, there will be a proportion that have circumstances that make them a higher risk, like twin A.

Yes

TwigtheWonderkid said:

Therefore, that group as a whole are going to incur more claims because of that proportion.

No.

The data would quite clearly show if non-fault policyholders are at more risk of being hit more than once, as we would see results something like:

- never had a non-fault accident: 100,000
- 1 non-fault accident: 5,000
- 2 non-fault accidents: 10,000
- 3 non-fault accidents: 20,000
...

There would be a greater number of people with multiple non-fault accidents than with a single non-fault accident; chance of accident would increase rather than decrease. What I would expect to see would be:

- never had a non-fault accident: 100,000
- 1 non-fault accident: 30,000
- 2 non-fault accidents: 10,000
- 3 non-fault accidents: 3,000
...

Or something similar - a commensurately reducing number of people with increasing non-fault accidents.


Additionally:
Where is the financial impact of the non-fault insurer? (I should say non-claim insurer, as distinguished by another user on another thread.) The insurer loses no money if the at fault party's insurer pays up.

Another principle of insurance is equitable premiums - the premium someone pays represents the risk they bring to the insurance pool - the non-fault vehicle owner (they're not even a driver at this point) makes no reduction to the insurance pool as a result of being hit. Even if they did, without the extra information of your Twins example (as I've tried to explain several times in previous posts) is not available to the insurer, therefore there is no information about the change of risk to the pool so charging more is not equitable (and as said, there's no financial risk anyway).

Edited by xRIEx on Friday 27th February 16:16

[Centurion07]

xRIEx said:

There would be a greater number of people with multiple non-fault accidents than with a single non-fault accident; chance of accident would increase rather than decrease. What I would expect to see would be:

- never had a non-fault accident: 100,000
- 1 non-fault accident: 30,000
- 2 non-fault accidents: 10,000
- 3 non-fault accidents: 3,000
...

That's probably what the stats are going to look like; you're using them in the wrong way though.

[xRIEx]

Centurion07 said:

xRIEx said:

There would be a greater number of people with multiple non-fault accidents than with a single non-fault accident; chance of accident would increase rather than decrease. What I would expect to see would be:

- never had a non-fault accident: 100,000
- 1 non-fault accident: 30,000
- 2 non-fault accidents: 10,000
- 3 non-fault accidents: 3,000
...

That's probably what the stats are going to look like; you're using them in the wrong way though.

How come?

[Centurion07]

xRIEx said:

Centurion07 said:

xRIEx said:

There would be a greater number of people with multiple non-fault accidents than with a single non-fault accident; chance of accident would increase rather than decrease. What I would expect to see would be:

- never had a non-fault accident: 100,000
- 1 non-fault accident: 30,000
- 2 non-fault accidents: 10,000
- 3 non-fault accidents: 3,000
...

That's probably what the stats are going to look like; you're using them in the wrong way though.

How come?

I'm not clever enough to explain it in a way you'll understand. That's not a dig at your intelligence, just saying that I don't think those stats support your argument, rather the opposite, but I'm not sure I can explain to you exactly how.

Leave it with me for a bit...

[TwigtheWonderkid]

xRIEx said:

Additionally:
Where is the financial impact of the non-fault insurer? (I should say non-claim insurer, as distinguished by another user on another thread.) The insurer loses no money if the at fault party's insurer pays up.

Your not getting it. Twin A hit whilst parked, tp leaves a note. Higher risk of twin A getting hit again, next tp may not leave a note. Financial hit for his own insurer.

Mr X ht in rear, non fault, tp insurer pays up. He stopped at a roundabout and tp expected him to go. Non fault claim but he's a hesitant driver. Next month, he pulls from a side road, hesitates when half way across, and gets hit. Fault claim, which was on the cards given the nature of his 1st accident.

[xRIEx]

Centurion07 said:

xRIEx said:

Centurion07 said:

xRIEx said:

There would be a greater number of people with multiple non-fault accidents than with a single non-fault accident; chance of accident would increase rather than decrease. What I would expect to see would be:

- never had a non-fault accident: 100,000
- 1 non-fault accident: 30,000
- 2 non-fault accidents: 10,000
- 3 non-fault accidents: 3,000
...

That's probably what the stats are going to look like; you're using them in the wrong way though.

How come?

I'm not clever enough to explain it in a way you'll understand. That's not a dig at your intelligence, just saying that I don't think those stats support your argument, rather the opposite, but I'm not sure I can explain to you exactly how.

Leave it with me for a bit...

Cool, I'm interested

Those numbers were obviously picked to illustrate my point of view, with a very crude 'one third' chance applied each time, aiming to show that even after one non-fault, the next tier would be one third the size of the previous tier. Obviously this would assume a fixed time period for all policyholders in question.

[xRIEx]

TwigtheWonderkid said:

xRIEx said:

Additionally:
Where is the financial impact of the non-fault insurer? (I should say non-claim insurer, as distinguished by another user on another thread.) The insurer loses no money if the at fault party's insurer pays up.

Your not getting it. Twin A hit whilst parked, tp leaves a note. Higher risk of twin A getting hit again, next tp may not leave a note. Financial hit for his own insurer.

That's what I'm saying, no there isn't a higher risk. There's the same risk. The risk profile (based on the insurer's knowledge of the insured through the information obtained) is the same. I would concede, a GPS/telematics insurance policy would provide greater information about usage and parking, so that would result in a different risk profile. That is not the OP's case (from what I can gather).

As I said above and should have clarified at the beginning, the distinction should be 'non-claim' (i.e. insurer does not pay out) rather than 'non-fault'.

The risk that an at fault party doesn't leave a note is a risk borne by all policyholders, that risk does not increase by being hit in the past, either.

TwigtheWonderkid said:

Mr X ht in rear, non fault, tp insurer pays up. He stopped at a roundabout and tp expected him to go. Non fault claim but he's a hesitant driver. Next month, he pulls from a side road, hesitates when half way across, and gets hit. Fault claim, which was on the cards given the nature of his 1st accident.

It isn't on the cards as the insurer does not know about the 'hesitant driver' information. We are dealing with hypothetical, manufactured situations in this thread with a god's eye view - insurers do not have this information and supposition. This is also a different scenario from the OP as in this example the vehicle was not parked and unoccupied.

[Centurion07]

I'm struggling!

Every time I think I can explain it it supports your view! I know the reasoning behind it I just can't explain it to someone else! Should've kept my nose out!

[TwigtheWonderkid]

xRIEx said:

TwigtheWonderkid said:

xRIEx said:

Additionally:
Where is the financial impact of the non-fault insurer? (I should say non-claim insurer, as distinguished by another user on another thread.) The insurer loses no money if the at fault party's insurer pays up.

Your not getting it. Twin A hit whilst parked, tp leaves a note. Higher risk of twin A getting hit again, next tp may not leave a note. Financial hit for his own insurer.

That's what I'm saying, no there isn't a higher risk. There's the same risk. The risk profile (based on the insurer's knowledge of the insured through the information obtained) is the same. I would concede, a GPS/telematics insurance policy would provide greater information about usage and parking, so that would result in a different risk profile. That is not the OP's case (from what I can gather).

As I said above and should have clarified at the beginning, the distinction should be 'non-claim' (i.e. insurer does not pay out) rather than 'non-fault'.

The risk that an at fault party doesn't leave a note is a risk borne by all policyholders, that risk does not increase by being hit in the past, either.

TwigtheWonderkid said:

Mr X ht in rear, non fault, tp insurer pays up. He stopped at a roundabout and tp expected him to go. Non fault claim but he's a hesitant driver. Next month, he pulls from a side road, hesitates when half way across, and gets hit. Fault claim, which was on the cards given the nature of his 1st accident.

It isn't on the cards as the insurer does not know about the 'hesitant driver' information. We are dealing with hypothetical, manufactured situations in this thread with a god's eye view - insurers do not have this information and supposition. This is also a different scenario from the OP as in this example the vehicle was not parked and unoccupied.

In your post of 16:13, you accepted that Twin A was a higher risk, now you're saying he isn't!!

The fact that the insurer doesn't know that Mr X is a hesitant driver doesn't alter the fact that he is. What the insurers do know is that for every group of people involved in non fault accidents, a proportion of them will be for reasons that make them a higher risk in the future of a claim where the insurer might end up paying.

We're going around in circles here and you seem to be tying yourself in knots denying something that is pretty obvious if you stop to think for a minute.

[blearyeyedboy]

My sister had a whole car written off after someone smacked into it in a car park. The next year her premium rose... by £10.

Keep shopping around, OP. Yes, you may be at slightly higher risk but I think the quotes you have thus far are taking the Michael.

[xRIEx]

Centurion07 said:

I'm struggling!

Every time I think I can explain it it supports your view! I know the reasoning behind it I just can't explain it to someone else! Should've kept my nose out!

That's what I like to hear

[xRIEx]

TwigtheWonderkid said:

xRIEx said:

TwigtheWonderkid said:

xRIEx said:

Additionally:
Where is the financial impact of the non-fault insurer? (I should say non-claim insurer, as distinguished by another user on another thread.) The insurer loses no money if the at fault party's insurer pays up.

Your not getting it. Twin A hit whilst parked, tp leaves a note. Higher risk of twin A getting hit again, next tp may not leave a note. Financial hit for his own insurer.

That's what I'm saying, no there isn't a higher risk. There's the same risk. The risk profile (based on the insurer's knowledge of the insured through the information obtained) is the same. I would concede, a GPS/telematics insurance policy would provide greater information about usage and parking, so that would result in a different risk profile. That is not the OP's case (from what I can gather).

As I said above and should have clarified at the beginning, the distinction should be 'non-claim' (i.e. insurer does not pay out) rather than 'non-fault'.

The risk that an at fault party doesn't leave a note is a risk borne by all policyholders, that risk does not increase by being hit in the past, either.

TwigtheWonderkid said:

Mr X ht in rear, non fault, tp insurer pays up. He stopped at a roundabout and tp expected him to go. Non fault claim but he's a hesitant driver. Next month, he pulls from a side road, hesitates when half way across, and gets hit. Fault claim, which was on the cards given the nature of his 1st accident.

It isn't on the cards as the insurer does not know about the 'hesitant driver' information. We are dealing with hypothetical, manufactured situations in this thread with a god's eye view - insurers do not have this information and supposition. This is also a different scenario from the OP as in this example the vehicle was not parked and unoccupied.

In your post of 16:13, you accepted that Twin A was a higher risk, now you're saying he isn't!!

Your earlier post asked if Twin A was a higher risk than Twin B: yes he is because of different risk profiles (and what I've tried to stress all along, a real life insurer is not aware of this difference); here you asked if Twin A has a higher chance of being hit because he's already been hit: no, he has the same chance as his behaviour and therefore risk profile has not changed.

If he has changed his behaviour in some way, then no there isn't the same risk. If he's less likely to visit his mother because of the negative event of the crash, his risk of being hit has reduced (in this limited scenario).

Let's break it down to absolute basics of probability: rolling a die. Roll a 1, it's a non-fault accident, any other number is a normal day in the car. Your chance of rolling a 1 is 1 in 6. If you roll a 1, the next time you roll the die your chance of rolling a 1 is still 1/6. The chance profile has not changed.

TwigtheWonderkid said:

The fact that the insurer doesn't know that Mr X is a hesitant driver doesn't alter the fact that he is.

Something else we need to separate: the truth of reality vs. statistical models. Yes, the truth is Mr X is a hesitant driver; the statistical model doesn't take this into account (I've not come across an insurer who asks you to rate your confidence when getting a quote). The absolute truth is not wholly represented by the insurer's statistical model.

TwigtheWonderkid said:

What the insurers do know is that for every group of people involved in non fault accidents, a proportion of them will be for reasons that make them a higher risk in the future of a claim where the insurer might end up paying.

No, because the very definition of non-fault means the risk was attributed to the at fault party. Using your 'hesitant' example, insurers can have millions of examples of non-fault accidents but nowhere can they split those accidents between drivers who are hesitant and drivers who aren't. Let's go back to the thread: OP was parked, vehicle was unoccupied, vehicle was struck. That is the issue I take with this approach of loading for 'non-claim' accidents.

TwigtheWonderkid said:

We're going around in circles here and you seem to be tying yourself in knots denying something that is pretty obvious if you stop to think for a minute.

No knots here, as explained above. You need to separate Reality (insurer models) vs. Hypothesys (this thread, where we can have a god-like view of our manufactured truths) and theory from application (as I've stated many, many times, insurers can only rate via facts presented to them, and parking at your mum's house doesn't qualify).

It's obvious to you as you're convinced you're right and are unwilling to bend. If you can present me with clear reasons (rather than suppositions) for loading for non-claim accidents, I will whole-heartedly accept it. I'm hoping Centurion07 can verbalise his thoughts, I'm interested in the contra points of view to help me learn, but I need facts not hypotheses.

[Centurion07]

Try looking at it like this: you can't go on to have a second/third/fourth crash until you've had your first, and until you've had your first you're the perfect customer.

The point being, if you have one crash, you potentially are going to cost them more than someone that has had none.

People who have no crashes (fault or not) demonstrate exactly that: they don't have crashes. People that have had at least one, demonstrate something about themselves which means they DO have crashes. That "something" is the very fact that they DO have crashes.

Regardless of the specific reason that caused the crash, the fact is that person did something to "cause" the crash. The "cause" is in inverted commas because although you wouldn't define "causing" an accident as being parked up in a car park, if your car gets hit whilst parked, the very fact it happened demonstrates that you park in a car park where your car has been hit, therefore you are a greater risk.

It's not fair in the sense that you may never visit that car park ever again, and therefore you could argue your chances of having another crash are the same as someone that hasn't. The difference between you and that someone else though, is that YOU are the one that has had an accident, YOU are the one that drove like an idiot/parked in the wrong place at the wrong time/whatever. The one overriding fact is YOU are the only common theme. YOU cost the insurance company money that someone else with no crashes hasn't done.

If you were an insurance broker, and two people came to you, one having had 4 claims, and the other none, all other things being equal, who would you consider the greater risk? I'm sure you'll agree it's the one with 4, right? If you agree with that then you must agree with the fact that ONE claim makes someone a higher risk? The whys and wherefores don't really make any difference.

The fact is, with just one claim versus none, you have demonstrated you are a higher risk.

ETA the dice-rolling is not a good analogy, as as you point out, the chances of rolling any number after a particular number are still the same; one in six. Having an accident is "caused" by you; either driving like a tt or parking somewhere where your car got hit i.e. it requires an action by you which is not affected by chance. You cannot influence the roll of a dice, however, even if someone crashes into your parked car, YOU are the one that parked it there, ergo YOU have influenced the crash/no-crash scenario.

Edited by Centurion07 on Friday 27th February 18:02

[TwigtheWonderkid]

Centurion07 said:

Try looking at it like this: you can't go on to have a second/third/fourth crash until you've had your first, and until you've had your first you're the perfect customer.

The point being, if you have one crash, you potentially are going to cost them more than someone that has had none.

People who have no crashes (fault or not) demonstrate exactly that: they don't have crashes. People that have had at least one, demonstrate something about themselves which means they DO have crashes. That "something" is the very fact that they DO have crashes.

Regardless of the specific reason that caused the crash, the fact is that person did something to "cause" the crash. The "cause" is in inverted commas because although you wouldn't define "causing" an accident as being parked up in a car park, if your car gets hit whilst parked, the very fact it happened demonstrates that you park in a car park where your car has been hit, therefore you are a greater risk.

It's not fair in the sense that you may never visit that car park ever again, and therefore you could argue your chances of having another crash are the same as someone that hasn't. The difference between you and that someone else though, is that YOU are the one that has had an accident, YOU are the one that drove like an idiot/parked in the wrong place at the wrong time/whatever. The one overriding fact is YOU are the only common theme. YOU cost the insurance company money that someone else with no crashes hasn't done.

If you were an insurance broker, and two people came to you, one having had 4 claims, and the other none, all other things being equal, who would you consider the greater risk? I'm sure you'll agree it's the one with 4, right? If you agree with that then you must agree with the fact that ONE claim makes someone a higher risk? The whys and wherefores don't really make any difference.

The fact is, with just one claim versus none, you have demonstrated you are a higher risk.

ETA the dice-rolling is not a good analogy, as as you point out, the chances of rolling any number after a particular number are still the same; one in six. Having an accident is "caused" by you; either driving like a tt or parking somewhere where your car got hit i.e. it requires an action by you which is not affected by chance. You cannot influence the roll of a dice, however, even if someone crashes into your parked car, YOU are the one that parked it there, ergo YOU have influenced the crash/no-crash scenario.

Edited by Centurion07 on Friday 27th February 18:02

Agreed. It's pretty obvious really. If the theory is non fault claims has no bearing at all on risk of future claims, then no amount of non fault accidents should have an affect on risk. So if someone says they've been hit whilst parked 10 times in the NCP car park near their office, but each time the guilty party left a note, is it right that they have no greater likelihood of being hit by an unknown tp than someone else in their office who has an allocated space next to the office and has never been hit at all?

Clearly that's utter nonsense.

As said, a 17 year old may be a more careful driver than his granny, but 1000 17 year olds will cost insurers a lot more in claims than 1000 grannies. 1 driver who has a non fault accident may never have another, but 1000 drivers with non fault claims will go on to have more claims overall than 1000 who have never claimed. because that group of 1000 will include people who park in dodgy car parks, or who visit their mum who lives on a dodgy bend, or who got hit in the rear because they are hesitant, and a million other scenarios that increase their future risk of a claim where their own insurer will be left to pick up the tab.

[omgus]

xRIEx said:

plus one as a magistrate - they know all the boring laws and regulations).

No they don't. JPs rely on Clerks of Court for that. Most JPs have a decent understanding of our Justice system but a pretty terrible understanding of laws and regulations.

Also didn't one of the InsCos risk analysis get leaked a few years ago and showed that statistically once someone had claimed for an accident (fault or non-fault) they were then more likely to claim again. I seem to remember a thread on here about it that then degenerated into people telling other people they were wrong and then someone arguing that the thousands of actuaries and I.T. systems that monitor and develop risk models were all wrong and didn't understand the individuals.

Which is not surprising because the whole point of statistical risk management is not to focus on the individuals but to have a very general pattern to enable you to make a profit.

[daveinhampshire]

My other half has just had this exact issue. He left his car parked outside my house, someone reversed into it and kindly left their details, claim completely accepted as other sides fault. He went to renew and the premium is up by 1/3rd. I did some research and it is mainly the Admiral/Elephant group who seem to charge the most. He went to Hastings who charged him an extra £35 for the year against the £350 that Admiral wanted.

A very modest increase in premium like Hastings is acceptable, to load someone's premium by 1/3rd is simple money making. I had less of a penalty when I barged someone off the road.

[Centurion07]

How much of that 1/3 increase was attributable to the accident though? Did you check?

[ferrariF50lover]

A row of identical cars, parked in identical fashion on a stretch of road which remains utterly constant in all respects along its entire length.
Driver comes along and, at a moment, sneezes. As he sneezes, he pulls the wheel hard right, hitting just one of the parked cars.
The owner of that car is now higher risk?
It's bks. Having a properly parked car hit on one occasion is a statistical anomaly, a total freak, a one off. To load a premium, especially to assess that the risk the OP poses is virtually double, is a scam of the highest order. You can dress it up any way you like, it's profiteering. Yet another stick with which to beat the average man.

[Centurion07]

Well it is and it isn't.

That guy has shown he's the unlucky one.

It's like an interviewer binning the top half of a pile of CVs to avoid hiring an unlucky person.

It might not be right, but as I said earlier, THAT particular person has shown he parks where his car is going to get hit. No-one else did.