Shake up the insurance industry
Discussion
We all know that 3rd party insurance is a must if you want to drive, so how about its legislated that 3rd party is a fixed fee ( much like the energy price cap) for all depending on a few things, such as , Car insurance group, conviction/driving history. Forget location, employment,no claims etc.
So if you had say a petrol Astra and you had no convictions or driving mishaps in the last 5 years it would a flat fee for everyone no mater where they lived or what they did.
The insurance companies would then be free to use the current system for 3rd party f/t and fully comp.
So if you had say a petrol Astra and you had no convictions or driving mishaps in the last 5 years it would a flat fee for everyone no mater where they lived or what they did.
The insurance companies would then be free to use the current system for 3rd party f/t and fully comp.
Good idea in theory but we all know the insurance companies will lie through their back teeth to get the highest fixed rate possible and the regulators won’t have the back bone to stand up to them.
“I know you have 40 years accident free motoring Mr Smith on your 0.9cc Smart car but it’s a fixed fee I’m afraid so your insurance is £750 per year, sorry.”
Knock on effect is the price of Fully Comp would ride inline, why would they cover someone Fully Comp for less than what a fixed rate policy would be.
“I know you have 40 years accident free motoring Mr Smith on your 0.9cc Smart car but it’s a fixed fee I’m afraid so your insurance is £750 per year, sorry.”
Knock on effect is the price of Fully Comp would ride inline, why would they cover someone Fully Comp for less than what a fixed rate policy would be.
The only people that would benefit from this are those that currently have higher insurance costs because they carry higher risk. The overall average cost of insurance wouldn't change much, it's just that those who pose a higher risk would pay a lower amount and those with lower risk profile would be paying more.
If we want cheaper insurance, we need to push for changes that control the cost of claims. Personal injury costs, hire car costs, inflated repair costs etc. Bigger picture is to also improve driving standards reduce car crime as well which seems to be sky rocketing at the moment. Everything else just feels like futile changes.
If we want cheaper insurance, we need to push for changes that control the cost of claims. Personal injury costs, hire car costs, inflated repair costs etc. Bigger picture is to also improve driving standards reduce car crime as well which seems to be sky rocketing at the moment. Everything else just feels like futile changes.
.Gad-Westy said:
The only people that would benefit from this are those that currently have higher insurance costs because they carry higher risk. The overall average cost of insurance wouldn't change much, it's just that those who pose a higher risk would pay a lower amount and those with lower risk profile would be paying more.
If we want cheaper insurance, we need to push for changes that control the cost of claims. Personal injury costs, hire car costs, inflated repair costs etc. Bigger picture is to also improve driving standards reduce car crime as well which seems to be sky rocketing at the moment. Everything else just feels like futile changes.
This is the problem, newer cars cost way too much to repair, and everyone wants like for like hire car, plus dont forget the 10k compo for whiplash, this is the problemIf we want cheaper insurance, we need to push for changes that control the cost of claims. Personal injury costs, hire car costs, inflated repair costs etc. Bigger picture is to also improve driving standards reduce car crime as well which seems to be sky rocketing at the moment. Everything else just feels like futile changes.
It either implies low-risk poor people subsidising higher risk poor people, or outside subsidy.
The latter won't happen were it privately arranged. The companies would want to financially silo the in-scheme customer-base thus avoiding subsidy from their non-scheme business and the risk that that the market-driven non-scheme business becomes uncompetitive. So every penny poor, risky Peter gets must be taken from poor, safe Paul. Not necessarily a bad thing, but you probably wouldn't be keen if you're a 50yo shelf-stacker who drives a shed on TPO with decades of NCB!
The state could do this, as it does elsewhere, but then it's either the same problem, or the tax-payer carrying the burden of subsidy.
The latter won't happen were it privately arranged. The companies would want to financially silo the in-scheme customer-base thus avoiding subsidy from their non-scheme business and the risk that that the market-driven non-scheme business becomes uncompetitive. So every penny poor, risky Peter gets must be taken from poor, safe Paul. Not necessarily a bad thing, but you probably wouldn't be keen if you're a 50yo shelf-stacker who drives a shed on TPO with decades of NCB!
The state could do this, as it does elsewhere, but then it's either the same problem, or the tax-payer carrying the burden of subsidy.
CoreyDog said:
Good idea in theory but we all know the insurance companies will lie through their back teeth to get the highest fixed rate possible and the regulators won’t have the back bone to stand up to them.
“I know you have 40 years accident free motoring Mr Smith on your 0.9cc Smart car but it’s a fixed fee I’m afraid so your insurance is £750 per year, sorry.”
Knock on effect is the price of Fully Comp would ride inline, why would they cover someone Fully Comp for less than what a fixed rate policy would be.
It's not just theory. Some places in the world have state insurance equivalent to third party insurance. You can then choose to top it up with private insurance equivalent to fully comp.“I know you have 40 years accident free motoring Mr Smith on your 0.9cc Smart car but it’s a fixed fee I’m afraid so your insurance is £750 per year, sorry.”
Knock on effect is the price of Fully Comp would ride inline, why would they cover someone Fully Comp for less than what a fixed rate policy would be.
Quebec is one place just off the top of my head.
A500leroy said:
We all know that 3rd party insurance is a must if you want to drive, so how about its legislated that 3rd party is a fixed fee ( much like the energy price cap) for all depending on a few things, such as , Car insurance group, conviction/driving history. Forget location, employment,no claims etc.
Polly Toynbee said:
Citizens Advice and the Social Market Foundation call for better social tariffs on life’s essentials. Energy, water, broadband and car insurance need universal rates of assistance all over the country for those who can’t afford them. There’s currently no deal for car insurance, so 1m households gave it up in the last year, hindering people’s ability to get to work, or even to get a job.
https://www.theguardian.com/commentisfree/2023/sep...If you ever wondered why school leavers in Japan seemed to be able to drive Skylines and Supras, when their contemporaries here were in Novas and Fiestas, the standard third-party insurance system over there is part of the reason. (The other part is Japan isn't de-industrialised, so there are well paid factory jobs you can get out of school).
Gad-Westy said:
If we want cheaper insurance, we need to push for changes that control the cost of claims. Personal injury costs, hire car costs, inflated repair costs etc. Bigger picture is to also improve driving standards reduce car crime as well which seems to be sky rocketing at the moment. Everything else just feels like futile changes.
This should be calculated for already in a perfect system, those with new cars that cost ridiculous amounts to repair should see massive premiums, as should those in high crime area or with cars that are stolen frequently but that does not seem to be the case.The massive hikes that some have seen this year seem to be slowly fixing this disparity but if i have an £800 20 year old vauxhall corsa my insurance would not be significantly cheaper than a brand new BMW or Tesla and thats the problem in my opinion, it should be hundreds of pounds a year for older cheap cars and thousands or tens of thousands for these new cars that are the root of the problem, but thats not the case for me, cheap cars are £1000 a year and expensive cars are £1500 a year roughly
A500leroy said:
We all know that 3rd party insurance is a must if you want to drive, so how about its legislated that 3rd party is a fixed fee ( much like the energy price cap) for all depending on a few things, such as , Car insurance group, conviction/driving history. Forget location, employment,no claims etc.
So if you had say a petrol Astra and you had no convictions or driving mishaps in the last 5 years it would a flat fee for everyone no mater where they lived or what they did.
The insurance companies would then be free to use the current system for 3rd party f/t and fully comp.
You could get a few friends together to lodge the £500K the government requires for you to self-insure, and then offer it to all and sundry.So if you had say a petrol Astra and you had no convictions or driving mishaps in the last 5 years it would a flat fee for everyone no mater where they lived or what they did.
The insurance companies would then be free to use the current system for 3rd party f/t and fully comp.
At that point you're exposed to all the liabilities your new customers will cause you, and you're basically the most stupid operator in the industry, doomed to massive liabilities.
richhead said:
This is the problem, newer cars cost way too much to repair, and everyone wants like for like hire car, plus dont forget the 10k compo for whiplash, this is the problem
There's no 10k compo for whiplash anymore but people won't put up with inconvenience so like for like replacement cars and fully approved repairs cost money.Would be a lot cheaper if everyone got the bus to work after they have been rear ended.
cabitup said:
richhead said:
This is the problem, newer cars cost way too much to repair, and everyone wants like for like hire car, plus dont forget the 10k compo for whiplash, this is the problem
There's no 10k compo for whiplash anymore but people won't put up with inconvenience so like for like replacement cars and fully approved repairs cost money.Would be a lot cheaper if everyone got the bus to work after they have been rear ended.
richhead said:
Having a cheaper car for a week or two wont hurt anyone, just because you have a ffrr to drive doesnt mean a corsa as a hire car wouldnt work for a bit.
I'd be surprised if the insurance docs weren't fairly weaselly regarding like-for-like; FFRR-man gets a fabric-spec Kia Sorento because the algorithm says tall + >4.8+m long = "large SUV."richhead said:
Having a cheaper car for a week or two wont hurt anyone, just because you have a ffrr to drive doesnt mean a corsa as a hire car wouldnt work for a bit.
Every car insurance policy I’ve ever had won’t give me a like for like car. Default has been you get a city car or supermini depending on what’s available (only had one claim so only tested once) and you have the option to pay more to get something bigger. That might get you something small family car sized. Given the existence of the “pay more to get something bigger” option, I can’t imagine they consumer insistence on a like for like hire car is driving prices up.
Or is my experience atypical and folks who smash up their X5 are insistent on having something the same size as an X5 as a hire car?
You are suggesting a t
t tax that everyone else will have to pay because of how a few tts drive on the road.
Note, the tts on the roads probably wouldn't pay the fixed fee either, the silent majority will be outraged and tut quitely to themselves.
Insurers should have to be transparent over their pricing, the market is completely opaque and getting a better i.e. lower premium is the result of luck rather than anything else.
t tax that everyone else will have to pay because of how a few tts drive on the road.Note, the t
ts on the roads probably wouldn't pay the fixed fee either, the silent majority will be outraged and tut quitely to themselves.Insurers should have to be transparent over their pricing, the market is completely opaque and getting a better i.e. lower premium is the result of luck rather than anything else.
Krhuangbin said:
I’ve always thought it’s bonkers that if you drive a car like pretty much most of the population, there’s a legal requirement to buy a private sector product?!!
Mad. Basic economic principles dictate that they are going to profiteer/ rip off the nation
Just to add to that, thinking about it..... what other private company products are we forced to buy apart from car insurance....? Utilities maybe but you can not use them/ limit usage. Car insurance - don’t buy it and drive - criminal conviction. It’s actually mad it’s in the hands of private enterprise, at least for the basic legal level required Mad. Basic economic principles dictate that they are going to profiteer/ rip off the nation
A car is a product bought by individuals and companies. Insurance is mandated to ensure that third parties are reimbursed if the driver of that product causes damage or injury.
Insurance companies are buisnesses and exist to make a profit. If you do not like the set up do not drive.
Motorists need to come to terms with the situation that the rest of the population has no obligation to subsidise your choice to wish to drive a vehicle.
Insurance companies are buisnesses and exist to make a profit. If you do not like the set up do not drive.
Motorists need to come to terms with the situation that the rest of the population has no obligation to subsidise your choice to wish to drive a vehicle.
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