Insurance question: 3rd party cover

[turboLP]

I've seen a lot of complaining about car insurance prices, and the argument that it's government-mandated and therefore should be more affordable. But what doesn't compute in my mind is: Why is 3rd party insurance not in the conversation?
1) I believe that is what the government actually mandates, not the full cover
2) When I last checked, 3rd party was between 2 and 3 times the price of the comprehensive cover! WHAT?? How does that work?? Why does no one talk about that?

[Gaumon]

I'd imagine the reasoning is that people who want TPF&T or TPO are the type who skimp on maintenance etc, - and generally lead a 'low grade' lifestyle. At least in the eyes of the comfortably-off middle classes.

[CubanPete]

My car insurance has barely gone up at all the last two years.

(£6 on the most recent renewal)

Car prices and repair work has gone up massively the last few years.

I also imagine the fire risk against new / expensive cars on PCP has increased, much as it did in 2009...

[Dingu]

turboLP said:

I've seen a lot of complaining about car insurance prices, and the argument that it's government-mandated and therefore should be more affordable. But what doesn't compute in my mind is: Why is 3rd party insurance not in the conversation?
1) I believe that is what the government actually mandates, not the full cover
2) When I last checked, 3rd party was between 2 and 3 times the price of the comprehensive cover! WHAT?? How does that work?? Why does no one talk about that?

It’s priced according to the anticipated claims cost/likelihood.

People buying Third Party crash lots/expensively. Therefore it’s very expensive.

If lots of people who didn’t crash bought it then it would become cheap.

[samoht]

The question "do you want fully comp or 3rd party?" is basically asking "are you the sort of person to take a massive risk with your second most valuable possession?".

Unsurprisingly, massive risk-takers tend to have more claims and thus cost insurers more money, and the insurance is priced accordingly.

[TwigtheWonderkid]

All of the above, plus for most vehicles and drivers, tp claim costs make up 85% of all the claims costs , the the tpo saving isn't that great, before you factor in the fecklessness of those who ask for the cover.

[turboLP]

So how is it that 3rd party liability insurance is less expensive in Contintental Europe? Better, more conscientious people?

[TownIdiot]

In general they have a different attitude to claims. That's a big factor in most countries.

We are very adept at maximising how to milk a claim.

[turboLP]

samoht said:

The question "do you want fully comp or 3rd party?" is basically asking "are you the sort of person to take a massive risk with your second most valuable possession?".

Unsurprisingly, massive risk-takers tend to have more claims and thus cost insurers more money, and the insurance is priced accordingly.

Maybe that's the problem: not everyone owns the most expensive car they can afford. Some people just don't want to have any significant money tied in an expensive car. That doesn't mean they have nothing to lose as far as behavior on the road goes.

Which brings me to: yeah, some people with a cheap car and 100 quid 3rd party liability insurance [i]could[i/] act like they have nothing to lose and just crash every day. But:
1. doesn't the insurance industry already have a mechanism to deal with that? Every time you crash, your premium goes up!
2. don't they have some sort of driver history available to them? They should at the very least see claims history. So unless it's a completely new driver (which is a fair game), I see no reason someone with years of experience and 0 claims (and if they have access - 0 points on the licence) should be profiled the way you described. That may have been ok in the 20th century when records were paper-based, but nowadays?

[Foss62]

It would be interesting to know what sort of quote would be given for TP only cover in London for something like a Range Rover?
We are led to believe that these have become virtually uninsurable in some areas due to a high number of thefts.
Owners/prospective owners might find TP only, coupled with relatively expensive anti-theft measures a sensible solution - but not if TP was mysteriously expensive.

[TownIdiot]

The problem is the sort of company that offers cover for high value vehicles won't have a price for TPO as the market is too small.

Will be available somewhere in a specialist market or if part of a large fleet where a real person looks at it but it's not worth offering it really.

[TwigtheWonderkid]

Foss62 said:

It would be interesting to know what sort of quote would be given for TP only cover in London for something like a Range Rover?

You also run the risk of a Daily Mail sad face story. Which is bad for business.

There was a story a year or so back about how a travel insurer had callously walked away from a claim, leaving a grieving widow unable to get her husbands body back to the UK. Only near the end of the story did it mention that he had agreed to exclude the condition he died of because due to his medical history, the premium to include it was too expensive.

[TwigtheWonderkid]

TownIdiot said:

The problem is the sort of company that offers cover for high value vehicles won't have a price for TPO as the market is too small.

Will be available somewhere in a specialist market or if part of a large fleet where a real person looks at it but it's not worth offering it really.

Exactly. Who wants a policy excluding theft on a high value vehicle where theft is the biggest risk. Maybe the odd multi millionaire but very few of them became rich by walking away from a £100K+ loss. So it wouldn't appeal to many of them either.

[Foss62]

TwigtheWonderkid said:

Exactly. Who wants a policy excluding theft on a high value vehicle where theft is the biggest risk. Maybe the odd multi millionaire but very few of them became rich by walking away from a £100K+ loss. So it wouldn't appeal to many of them either.

I was thinking more of people who might assess the risk vs the premium (if that premium is really 20K+ as regularly reported) and then be prepared to adjust things a bit further in their favour.
Many would doubt that suffering a theft every five years is likely - so they would save that 100K every five years they got away with it (assuming the TPO was a few hundred pounds - no reason why it shouldn’t be).
Get an ‘analog’ fuel tap or ignition switch fitted + an obvious aftermarket steering lock, and you would put off a fair few theft attempts.

Edited by Foss62 on Tuesday 20th August 22:57

[TownIdiot]

Not enough people want that, so it's not offered.

[TwigtheWonderkid]

Foss62 said:

TwigtheWonderkid said:

Exactly. Who wants a policy excluding theft on a high value vehicle where theft is the biggest risk. Maybe the odd multi millionaire but very few of them became rich by walking away from a £100K+ loss. So it wouldn't appeal to many of them either.

I was thinking more of people who might assess the risk vs the premium (if that premium is really 20K+ as regularly reported) and then be prepared to adjust things a bit further in their favour.
Many would doubt that suffering a theft every five years is likely - so they would save that 100K every five years they got away with it (assuming the TPO was a few hundred pounds - no reason why it shouldn’t be).
Get an ‘analog’ fuel tap or ignition switch fitted + an obvious aftermarket steering lock, and you would put off a fair few theft attempts.

Edited by Foss62 on Tuesday 20th August 22:57

Firstly, hardly anyone is being asked to pay £20K. But lots of people are being asked to pay £5K to £7K, and they're making a lot of noise about it. But working your figures on £5K instead of £20K changes the dynamic a bit.

Secondly, there are other ways to lose or serious damage a £100K Range Rover other than theft. Just because it's a high theft risk doesn't mean you're immune from smashing it up, rolling it over, or having a tree fall on it. Or in a city, having it hit whilst parked by an unknown tp.