So, car insurance companies don't make money !!!
Discussion
Folk's,
My local radio station were talking to a rep for the car insurance companies - following the presenter saying that their insurance has gone up by £80, this year with full no claims.
The rep was claiming that ALL car insurance companies had made no 'real' profits in the last ten years. Mainly due to the 'no win - no fee' bragade.
I cannot see how this is true, its a license to print money.
My local radio station were talking to a rep for the car insurance companies - following the presenter saying that their insurance has gone up by £80, this year with full no claims.
The rep was claiming that ALL car insurance companies had made no 'real' profits in the last ten years. Mainly due to the 'no win - no fee' bragade.
I cannot see how this is true, its a license to print money.
DCS01 said:
Folk's,
My local radio station were talking to a rep for the car insurance companies - following the presenter saying that their insurance has gone up by £80, this year with full no claims.
The rep was claiming that ALL car insurance companies had made no 'real' profits in the last ten years. Mainly due to the 'no win - no fee' bragade.
I cannot see how this is true, its a license to print money.
They take your money and put it on black. My local radio station were talking to a rep for the car insurance companies - following the presenter saying that their insurance has gone up by £80, this year with full no claims.
The rep was claiming that ALL car insurance companies had made no 'real' profits in the last ten years. Mainly due to the 'no win - no fee' bragade.
I cannot see how this is true, its a license to print money.
Dr_Gonzo said:
Esure, MMA, Equity Red Star - all have lost millions this year. Can you point me to the insurers who are making the huge profits you seem to think they are 'all' making?
Due to poor investments, bad stock returns and loss of other incomes nothing to do with paying out too much in claims It's basci maths really....
Let's say you pay £300 a year for insurance on your £15,000 car with the same company for 5 years. So in that five years you don't have a claim and have paid a total of £1500 for your insurance.
In year five you have an accident by yourself that causes your car to be written off at a market value of £10k (rough estimates), which means that the company pays you the full £10k (less you excess) meaning that they have lost £8,500 immediately.
Fine if you never claim, but there will always be someone else claiming.
Thus as claims rise, premiums have to aswell so your insurance company can try and sustain at least a little bit of profitablity to keep your insurance going...
HTH
Let's say you pay £300 a year for insurance on your £15,000 car with the same company for 5 years. So in that five years you don't have a claim and have paid a total of £1500 for your insurance.
In year five you have an accident by yourself that causes your car to be written off at a market value of £10k (rough estimates), which means that the company pays you the full £10k (less you excess) meaning that they have lost £8,500 immediately.
Fine if you never claim, but there will always be someone else claiming.
Thus as claims rise, premiums have to aswell so your insurance company can try and sustain at least a little bit of profitablity to keep your insurance going...
HTH
Fatman2 said:
"Chief executive Henry Engelhardt said the UK car insurance business remained "central to our success", producing a pre-tax profit £206.9m"
The no win-no fee culture is causing allot of the problems, in some cases adding 1,000's of £'s so claims that ten years ago would have simply been settled with vehicle repair/replacement. There are also allot more people nowadays driving newer more expensive cars because of easy credit. I have also heard that many insurance companies that are foreign owned are pulling out of the UK market because it isn't competitive enough.
So they are now putting their prices up to compensate.
So they are now putting their prices up to compensate.
There is so much competition in the insurance marketplace that there can't really be any conspiracy to "rip people off" as there's others to go to.
The Admiral link is proof of this, they are often the cheapest for one and (I would guess) run well and efficiently to generate good profits.
Main reasons as I see it:
No-win no fee
Spurious injury claims
Inflated repair costs
Like for like courtesy/hire car costs
I, sadly (through no fault of my own, I might add) may have contributed to the last item. Was hit from behind (total fault of 3rd party etc.) and needed new rear bumper at repairers. Anyway, due to how insurers and repair centre "work", they had my car for over a week (basically I drop it off monday morning and it goes onto their job list for the week) and the hire car (as I understand) was in the region of £100 per day. Only an Insignia, nothing "premium" etc.
So, assuming the bumper sprayed/fitted was £500, the hire car cost was something like £800. I was only 20 minutes from the repair centre can could have (and was happy to) drop car off when they were actually ready for it and pick it up anytime so the hire car could have only been 2 days (£200) in my case. It's *not how repairers work* in that they have a list for the week as stated above. Magnify this case by many people and hire car costs will be quite costly. I was astonished to learn that something like an Insignia costs so much per day!
Normally, I would have normally been happy with their crappy small repairers courtesy car (free I think) instead of the more costly hire car, however I'm rather tall and have chronic back problems so struggle to get into cars, let alone some small KA or Fiesta! However, I wonder how many people who are able and fit would *insist* on a nice hire car.
Some *accident management* companies appear to get away with hiring German premium brands for many people, these can cost a fortune, quite often jobs can take a while so the costs really add up. I would argue that no-one *needs* a nice Merc/BMW for a few weeks whilst their car is being fixed, a Mondeo/Insignia will do the job fine for half the cost. Match the size of car by all means but *like for like* badge hunting just puts the costs up a hell of a lot.
The Admiral link is proof of this, they are often the cheapest for one and (I would guess) run well and efficiently to generate good profits.
Main reasons as I see it:
No-win no fee
Spurious injury claims
Inflated repair costs
Like for like courtesy/hire car costs
I, sadly (through no fault of my own, I might add) may have contributed to the last item. Was hit from behind (total fault of 3rd party etc.) and needed new rear bumper at repairers. Anyway, due to how insurers and repair centre "work", they had my car for over a week (basically I drop it off monday morning and it goes onto their job list for the week) and the hire car (as I understand) was in the region of £100 per day. Only an Insignia, nothing "premium" etc.
So, assuming the bumper sprayed/fitted was £500, the hire car cost was something like £800. I was only 20 minutes from the repair centre can could have (and was happy to) drop car off when they were actually ready for it and pick it up anytime so the hire car could have only been 2 days (£200) in my case. It's *not how repairers work* in that they have a list for the week as stated above. Magnify this case by many people and hire car costs will be quite costly. I was astonished to learn that something like an Insignia costs so much per day!
Normally, I would have normally been happy with their crappy small repairers courtesy car (free I think) instead of the more costly hire car, however I'm rather tall and have chronic back problems so struggle to get into cars, let alone some small KA or Fiesta! However, I wonder how many people who are able and fit would *insist* on a nice hire car.
Some *accident management* companies appear to get away with hiring German premium brands for many people, these can cost a fortune, quite often jobs can take a while so the costs really add up. I would argue that no-one *needs* a nice Merc/BMW for a few weeks whilst their car is being fixed, a Mondeo/Insignia will do the job fine for half the cost. Match the size of car by all means but *like for like* badge hunting just puts the costs up a hell of a lot.
My mate's van got nudged by his neighbour while it was parked on a grass verge. She was good enough to let him know as the damage was hardly noticeable; she reported it to her insco nonetheless.
A few days later, my mate took a phone call from someone suggesting that he could be awarded up to £10k for the accident... "for personal injury". He told them he wasn't in the vehicle when it was hit, but the person on the phone kept at it, asking if his neck felt a bit stiff...
A few days later, my mate took a phone call from someone suggesting that he could be awarded up to £10k for the accident... "for personal injury". He told them he wasn't in the vehicle when it was hit, but the person on the phone kept at it, asking if his neck felt a bit stiff...
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