Insurance prices like Whaaat?

Insurance prices like Whaaat?

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Discussion

stuckmojo

2,955 posts

187 months

Sunday 9th April 2017
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One has to do the shop dance every year as the renewals always come in higher. (assuming no claims or change in circumstances).

The insurance statistical model works on huge numbers and doesn't consider individual factors. They prefer having a "computer says no" structure than having expensive humans assessing risk properly, hence the illogical pricing for things that don't fit straight into the matrix.

The insurance market in the UK is the worst I've experienced. Same as banking (especially the mortgage industry). Designed to milk the customer rather and lure with smoke and mirrors rather than providing a service.


HTP99

22,442 posts

139 months

Sunday 9th April 2017
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oceanview said:
It seems pointless having different insurance groups if it doesn't have much bearing on the premium charged, then.

For example, you might see a "low" group 5 car (but statistically involved in lots of claims) and think that should be cheap but, then find out a group 15 car is cheaper to insure- less claims!!
My wife recently only just started her own insurance policy; it was always in my name with her as the main driver, her circumstances changed and she needed to be insured for business miles and due to my job I couldn't add business use for her to my policy so she had to start her own policy without me on it.

She recently replaced her group 3, 53 plate Citroen C3 for a group 11 Fiat 500 Twinair, just before she purchased the Fiat something made me check the insurance groups when noticing it was a group 11; 8 groups higher than the Citroen, I had a moment of panic and got her to check the costs (asuming it would be quite a bit higher), it was £40 a year cheaper for the Fiat.

Edited by HTP99 on Wednesday 19th April 22:11

SteveSteveson

3,209 posts

162 months

Sunday 9th April 2017
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stuckmojo said:
They prefer having a "computer says no" structure than having expensive humans assessing risk properly, hence the illogical pricing for things that don't fit straight into the matrix.
How is a human going to be more logical about something than a computer? The models they use are very complex. Just because you can't understand the logic doesn't mean there isn't any. I haven't seen what the insurance industry do, but I have been involved in the construction of a credit risk score card, and I understand that insurance ones are far more complex as they are aloud to do things we (the credit industry) aren't, like profile on geographic area.

Computers score based on the solid facts in front of them, based on the scorecard that has been built at great cost. Humans have all sorts of bias, like automatically liking people with the same name as them.

robemcdonald

8,715 posts

195 months

Sunday 9th April 2017
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A,while back I was thinking of selling my Alfa (£200 to insure) for something else.

I looked at a BMW Z4.

3.0 - £480 / year
2.0 - £530 / year

I also looked at a MR2 roadster (thought it may be cheaper and more reliable) it was the same as the 3.0 beemer.

I also looked at several other cars and came to the conclusion that generally the more "rare" the car, the cheaper the insurance.

With that in mind I got a quote on a £100000 Ferrari F355. (Just for research) £1200 / year. I thought it would be several times that.

I'm now saving / waiting for a lottery win and keeping the Alfa.

stuckmojo

2,955 posts

187 months

Sunday 9th April 2017
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SteveSteveson said:
How is a human going to be more logical about something than a computer? The models they use are very complex. Just because you can't understand the logic doesn't mean there isn't any. I haven't seen what the insurance industry do, but I have been involved in the construction of a credit risk score card, and I understand that insurance ones are far more complex as they are aloud to do things we (the credit industry) aren't, like profile on geographic area.

Computers score based on the solid facts in front of them, based on the scorecard that has been built at great cost. Humans have all sorts of bias, like automatically liking people with the same name as them.
Read the part you quoted again.

Of course the algorithms are built on some kind of logic, and they put people in different buckets. If you don't fit in one of them the response is - illogical.

Computers score on statistical models, no surprise there.

Regardless of this, my initial point stands, the UK insurance - and credit - industries are the worst I've experienced. And it's not down to them using robots to do the work.

anonymous-user

53 months

Sunday 9th April 2017
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exelero said:
I'm only 24 but I was just playing on the comparison websites while hunting my next car. I quoted two different vehicles with all the details being the same, the only change was the REG. Here comes the interesting bit: first car to get a quote on: Lexus GS300 -around 970 for a year which is fair with me being only 24 and that having 220HP and a 3 litre petrol engine. Then I quoted my current car which is a MK1 1.6 Focus, guess what ......1289 or something like that. Can someone explain why? (I currently pay 680 per year for it)
Im 24 and have a mk6 golf gti edition 35 and my insurance is 490 for the year smile



TwigtheWonderkid

43,246 posts

149 months

Sunday 9th April 2017
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stuckmojo said:
The insurance statistical model works on huge numbers and doesn't consider individual factors.
A black box policy remedies that issue but everyone seems to moan about those too.

stuckmojo said:
The insurance market in the UK is the worst I've experienced.
My friends in Germany and France say exactly the same about their insurance industry, and can't believe how cheap UK insurance is. Which indeed it is, for the majority of folk who pay under £200 comp for their 1.4 hatch, because they are 40+ and don't live in a big city centre and who have clean licences with max bonus.

rossi1001

111 posts

120 months

Sunday 9th April 2017
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HedgeyGedgey said:
.....And even cheaper are huge executive saloons that no one our age would drive, so there's fewer statistics available to them
This is true. I had a 1999 Honda Legend last year and with a 3.5l petrol engine. This was cheaper to insure than the Citroën C4 1.6 hdi it was replaced with!

exelero

Original Poster:

1,890 posts

88 months

Monday 10th April 2017
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DSGbangs said:
Im 24 and have a mk6 golf gti edition 35 and my insurance is 490 for the year smile
Good for you biggrin

anonymous-user

53 months

Monday 10th April 2017
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exelero said:
DSGbangs said:
Im 24 and have a mk6 golf gti edition 35 and my insurance is 490 for the year smile
Good for you biggrin
My point being, every insurance thread everyone compares, when everyone has different circumstances smile how pointless.

98elise

26,366 posts

160 months

Monday 10th April 2017
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TwigtheWonderkid said:
stuckmojo said:
The insurance statistical model works on huge numbers and doesn't consider individual factors.
A black box policy remedies that issue but everyone seems to moan about those too.

stuckmojo said:
The insurance market in the UK is the worst I've experienced.
My friends in Germany and France say exactly the same about their insurance industry, and can't believe how cheap UK insurance is. Which indeed it is, for the majority of folk who pay under £200 comp for their 1.4 hatch, because they are 40+ and don't live in a big city centre and who have clean licences with max bonus.
Also NCB is specific to the individual. If you believe you are a good driver and want recognition in the first year, get a black box. After that your insurance is directly affected by YOUR claims history. Its one of the biggest factors on how much your insirance costs.

In your example you have just described me. I'm 50, drive a 1.4 hatch as my daily, have a clean licence and haven't had an accident in 20 years.. My insurance is less than £200 per year, so less than £15 a month.

I always wonder why those that think insurance is way too expensive haven't started a business selling cheap insurance to young drivers.

Bradley1500

766 posts

145 months

Monday 10th April 2017
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I need to renew the insurance for my Supra turbo next month, so have recently been shopping around for quotes. The best I have received so far is £620, which considering I’m a 22 year old male with a non-fault claim declared I though was good.

The bit that doesn’t make sense to me at least, is my Golf TDI is nearly as expensive to insure – not that I’m complaining.

I know a lot of Golf TDIs would have had claims against them, especially in my age group; but surely lots of young dheads have written off Supra’s too?

Richieboy3008

2,058 posts

182 months

Wednesday 19th April 2017
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'My' Golf R was £280. The previous 1996 1.3 Fiesta was £270... . My E36 M3 was £120. My current 2004 XC90 is £450

johnxjsc1985

15,948 posts

163 months

Wednesday 19th April 2017
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£200 for my XKR which is fine but scroll through the other quotes and it goes upto £1500 WTF is that all about?.

TwigtheWonderkid

43,246 posts

149 months

Wednesday 19th April 2017
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johnxjsc1985 said:
£200 for my XKR which is fine but scroll through the other quotes and it goes upto £1500 WTF is that all about?.
The post office charge me about 50p to deliver a letter from London to Inverness. DHL want £79 to do the same. I guess that although they are both in the delivery business, they are each looking for different types of customer.

Some insurers want XKRs and price to attract them, others wouldn't touch them with a barge pole and price accordingly.

I'm not sure how this is a constant source of amazement to otherwise intelligent people.



HannsG

3,031 posts

133 months

Wednesday 19th April 2017
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My Panda 100HP costs me £450. 3 points and a claim was made against me in a few years ago.

I learnt a lesson with going for cheap insurance. The outfit I was with for my M3 went bust and left me out of pocket.


exelero

Original Poster:

1,890 posts

88 months

Friday 21st April 2017
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TwigtheWonderkid said:
The post office charge me about 50p to deliver a letter from London to Inverness. DHL want £79 to do the same. I guess that although they are both in the delivery business, they are each looking for different types of customer.

Some insurers want XKRs and price to attract them, others wouldn't touch them with a barge pole and price accordingly.

I'm not sure how this is a constant source of amazement to otherwise intelligent people.
I'm sure I remember you saying the same thing but it was FedEx that time? smile

Geoffrey Boycott

38 posts

88 months

Friday 21st April 2017
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ANJ91 said:
I believe that those comparison price sites store your information and they only work well for the first time you do it as they apply some kind of new customer discount.

When you check to renew, they already have your details therefore they do not apply a new customer discount and make the price of the results go up significantly.

To test it out, try to run a quote again but change some details slightly. For example, try changing your date of birth by 1 day either way, use your next door neighbour address and maybe change your first name.

I have done this and the quotes were much cheaper. Then I had to call them and give them the quote and tell them that I have made a mistake and inputted my date of birth wrong by 1 day and ask them to update it. They will and the price might go up but then question them why does it matter if you were born 1 day later, how does it guarantee a £300 increase. They should change the details and match whatever quote you got.

Good luck.

Edited by ANJ91 on Sunday 9th April 00:03
I know from personal experience that this is the case.

Last year when renewing using comparison sites my cheapest quote was from Admiral and originally £2000. When I changed the name to a fictional one the quote immediately dropped to £1200.

Admiral had a black mark against my name but once I had the quote the salesman on the phone said I could update the name on the documents free of charge after signing up which is exactly what I did.

Unfortunately the final price was £1400 because of a damn speed awareness course!

TwigtheWonderkid

43,246 posts

149 months

Friday 21st April 2017
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exelero said:
TwigtheWonderkid said:
The post office charge me about 50p to deliver a letter from London to Inverness. DHL want £79 to do the same. I guess that although they are both in the delivery business, they are each looking for different types of customer.

Some insurers want XKRs and price to attract them, others wouldn't touch them with a barge pole and price accordingly.

I'm not sure how this is a constant source of amazement to otherwise intelligent people.
I'm sure I remember you saying the same thing but it was FedEx that time? smile
Probably. hehe

But it's an illustration of how 2 separate firms in the same business target different types of customer and price accordingly.

Everyone accepts this as perfectly sensible in every type of industry apart from car insurance, where people are constantly furious that they got a quote from ABC for £300 but XYZ wanted £2K. Therefore XYZ are obviously rip off merchants! rolleyes

popeyewhite

19,622 posts

119 months

Friday 21st April 2017
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TwigtheWonderkid said:
The post office charge me about 50p to deliver a letter from London to Inverness. DHL want £79 to do the same. I guess that although they are both in the delivery business, they are each looking for different types of customer.
Except you're not comparing like for like as DHL don't provide the same service, DHL are a parcel delivery company and don't deliver letters. God knows where you plucked £79 from.

TwigtheWonderkid said:
Some insurers want XKRs and price to attract them, others wouldn't touch them with a barge pole and price accordingly.
Whilst this is true it doesn't explain the huge variance in quotes from companies that purport to insure the same car.

TwigtheWonderkid said:
I'm not sure how this is a constant source of amazement to otherwise intelligent people.
Your uncertainty has clouded your thinking: Another factor is people aren't legally obliged to use The Post Office or DHL. They are legally obliged to take car insurance. This implies to many that an industry standard or set of regulations are in place to ensure fairness. So when they receive wildly different quotes they understandably question the system.